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Sunny days ahead for rooftop solar capacity as installations keep mounting

Sunny days ahead for rooftop solar capacity as installations keep mounting

Sunny days ahead for rooftop solar capacity as installations keep mounting
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3 Sept 2024 2:44 PM IST

India's rooftop solar capacity is heading northward and seems well set to take-off into the future. The country added 1.1 gigawatts (GW) of rooftop solar capacity in the first half (1H) of calendar year (CY) 2024, the highest 1H installations to date. The installations rose 26 per cent year-over-year (YoY) compared to the 873 MW installed in 1H 2023. Quite significantly, residential consumers contributed to over 72 per cent of the overall installations in Q2. If the recent Mercom India's Q2, 2024- India Rooftop Solar Market Report is anything to go by, in the second quarter (Q2) of this year, 731 MW of rooftop solar systems were installed, the highest for any new quarterly capacity and an increase of almost 89 per cent YoY compared to 388 MW in Q2 2023. Installations were up more than 99 per cent quarter-over-quarter (QoQ) compared to 367 MW in Q1 2024. These figures amply prove that the rooftop solar sector in the country is finally taking off, largely due to Prime Minister Narendra Modi's rooftop solar initiative, which has sparked unprecedented consumer interest. After having overcome the initial setbacks, we can now anticipate consistently higher installation rates in the residential segment moving forward.

Nevertheless, one has to keep in mind that the success of the program could be hindered by domestic module availability, component shortages, and escalating costs if these issues are not resolved at the earliest. One must remember that the growth in installations during the first half (1H) and Q2 of 2024 was largely driven by increased residential rooftop solar capacity under the PM—Surya Ghar: Muft Bijli Yojana (PM—Surya Ghar). Residential solar installations surged by almost 923 per cent quarter-over-quarter (QoQ), making up over 72 per cent of the projects commissioned during the quarter. The industrial segment, on its part, accounted for over 23 per cent of the quarterly installations. Commercial and government segments accounted for four per cent and 0.7 per cent of capacity additions, respectively.

Looking at the state-wise rooftop solar sector scenario, Gujarat, Maharashtra, Kerala, Uttar Pradesh, and Tamil Nadu led rooftop solar capacity additions in Q2 2024. The top five states accounted for over 81 per cent of installations in Q2. As of June, India had a cumulative installed rooftop solar capacity of 11.6 GW. The top 10 states contributed over 78 per cent of cumulative rooftop solar installations till June. Gujarat, Maharashtra, Rajasthan, Kerala, and Karnataka remained at the forefront in terms of cumulative installed rooftop solar capacity during the quarter. Kerala registered the highest compounded quarterly growth rate of nearly nine per cent between Q2 2023 and Q2 2024. When it comes to cost, the average cost of rooftop solar systems increased by over 12 per cent quarter-over-quarter (QoQ) after six consecutive quarters of decline, largely due to the growing use of modules that meet domestic content requirements. Despite this, the average cost remained nearly 10 per cent lower year-over-year (YoY). Going by the trends, one can look forward to brighter sunny days ahead.

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