India Rooftop Solar Market Outlook 2021

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India is among the prominent countries that are leading the race for solar power generation as its solar capacity has witnessed exponential growth in the past few years. As of November 2020, India has a combined solar capacity of more than 36 GW. The National Solar Mission has an ambitious target to increase this capacity to 100 GW by 2022.

Among all the different types of solar power generation methods, one is becoming increasingly popular among the masses. This is rooftop solar power technology. Initially, rooftop solar power harnessing was limited to industrial applications, but lately, residential buildings are also joining the mix. As the cost of rooftop solar panels is also coming down globally, the Indian government is looking to capitalize on the situation.

It must be noted that the Covid-19 pandemic halted the progress in the solar rooftop market, and 2020 didn’t see any significant landmarks being accomplished. Many ongoing projects had to be put on hold as international shipments couldn’t be completed. That is why the Indian government is focused on having a productive 2021 when it comes to the rooftop solar power industry. 

Since the beginning of the new year, the rooftop solar industry has witnessed a revival as several on-hold projects have now resumed, and many new projects have joined the pipeline. By the end of the second quarter of 2021, the rooftop solar market will be back on its feet. 

Statistics

Many research and intelligence firms have predicted a bright future for the Indian rooftop solar market. Favorable government policies, tax benefits, incentives, and rising environmental concerns will be the driving factors for this industry’s rise. Here are some relevant statistics related to the Indian rooftop solar market. 

  • The Indian rooftop solar market is expected to grow at a CAGR of more than 25% for the next five years.
  • The industrial segment will dominate the market growth during this time, followed by the residential segment.
  • The share of the industrial segment has grown from 23% in 2015 to nearly 70% in 2019.
  • Maharashtra, Rajasthan, Tamil Nadu, Karnataka, and Gujarat are the five leading states in the rooftop solar power industry. These 5 states account for nearly 46 % of the total rooftop solar capacity in the country.
  • In 2020, the commercial & industrial sectors accounted for 4373 MW of energy, followed by 804 MW of the residential sector and 776 MW of the public sector.
  • Some reports have forecasted nearly 40% growth in rooftop installations year-over-year in 2022.

Statewise Analysis

  • Maharashtra has the highest installed rooftop solar capacity with more than 473 MW of Power installed.
  • Maharashtra is followed by Tamil Nadu (312 MW), Karnataka (273 MW), Rajasthan (270
  • MW) and Uttar Pradesh (223 MW).
  • Despite substantial efforts, India has achieved more than 10% of its target of installing 40 GW of rooftop solar power capacity by 2022.
  • Maharashtra, Gujarat, and Uttar Pradesh have the highest government channel partner companies with 516, 335, and 212, respectively.
  • The mountainous regions of Jammu & Kashmir, Himachal Pradesh and Uttarakhand have an installation target of 450 MW, 320 MW, and 350 MW, respectively, by 2022.
  • Maharashtra, Uttar Pradesh, and Tamil Nadu have the highest targets with 4700 MW, 4300 MW, and 3600 MW respectively.
  • Assam has the highest target among the northeastern states with 250 MW.

Impact on Residential, Commercial & Industrial Segments

  • Solar power is now cheaper than commercial & industrial grid tariffs in most states at Rs6-11/kWh due to the fall in levelized cost of electricity (LCOE) for rooftop solar.
  • The payback period has come to 3-4 years for C&I consumers and is expected to reduce further owing to the fall in equipment costs.
  • CleanTech, CleanMax and Renew are among the three leading project developers for rooftop solar programs in India.
  • Goodwe, Growatt, Sungrow and Solis are some of the leading inverter suppliers for rooftop solar installations. 
  • For several multinational companies, decreasing carbon emissions is one of the primary drivers for switching to solar power. 
  • The growth of rooftop solar power in residential segments has been slow due to lack of finance, untimely delivery of subsidies, and lack of awareness.
  • The government has rolled out the second phase of residential solar installation and is offering a 20- 40% financial subsidy to residential consumers for new rooftop solar installations ranging between 3- 10kW, including user-clusters such as housing societies. 

Recent Government Policies, Regulations, and Amendments

  • World Bank and State Bank of India (SBI) to finance rooftop solar power panels’ installation. This finance will be available to both suppliers and consumers.
  • Phase 2 of the rooftop solar power scheme will  provide central financial assistance (CFA) for setting up 4 GW of grid-connected rooftop solar plants in the residential sector.
  • For the 38 GW capacity planned under Phase II, financial assistance is divided into several parts, with Rs 6,600 crore allotted as CFA for 4 GW residential capacity. Furthermore, an additional Rs 4,950 crore is marked as an incentive to distribution companies, Rs 66 crore for capacity building @1% of CFA, and Rs 198 crore as service charge @3% of CFA.

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