India achieved a milestone by adding over 10 GW of solar capacity in the first quarter (Q1) of 2024, marking the highest quarterly installation to date.
This figure represents an almost 400 per cent year-over-year (YoY) increase compared to the over 2 GW installed in Q1 2023, as per the recent Q1 2024 India Solar Market Update from Mercom India Research. Quarter-over-quarter (QoQ) capacity additions also saw a dramatic surge of 414 per cent, rising from nearly 2 GW in Q4 2023.
In Q1 2024, India installed 9.7 GW of large-scale solar capacity, which included 1.8 GW from open access solar projects. This represents a 524 per cent QoQ increase and a nearly 534 per cent YoY rise. Priya Sanjay, Managing Director of Mercom India, said, "The surge in installations in Q1 2024 was driven by the commissioning of several delayed projects that had received extensions in previous quarters due to high module prices. Falling module prices and suspending the Approved List of Models and Manufacturers (ALMM) order enabled developers to import modules at lower costs, facilitating project completions."
Several projects were commissioned early to take advantage of the ALMM order suspension. Additionally, granting grid connectivity to projects previously stalled in the Great Indian Bustard habitat significantly contributed to the record-breaking installations. "There is a substantial pipeline of large-scale projects scheduled for 2024, positioning India for a record-breaking year by a significant margin. Assuming stability in policy and supply chains, and if government agencies continue to auction projects and meet the set targets, India is poised to be among the top three solar markets globally", commented Raj Prabhu, CEO at Mercom Capital Group. In Q1 2024, India added 15.2 GW of new power capacity, with solar power accounting for 66 per cent of these additions.
Rajasthan and Gujarat led the large-scale solar installations, contributing 38 per cent and 35 per cent of the capacity additions, respectively, while Madhya Pradesh followed with 8 per cent. As of March 2024, India's cumulative installed solar capacity reached 82 GW. Solar energy represented 18.5 per cent of India's total installed power capacity and 43 per cent of the total installed renewable energy capacity.
Rajasthan boasted the highest cumulative installed large-scale solar capacity, accounting for 29 per cent of the national total, followed by Gujarat and Karnataka at 14 per cent each. By the end of Q1 2024, India's large-scale solar project pipeline stood at 143.3 GW, with an additional 93.1 GW of projects tendered and pending auction.
The average cost of large-scale solar projects fell by 7 per cent QoQ and 28 per cent YoY, significantly improving the projects' internal rate of return. During the quarter, tenders totaling 30.7 GW were announced, up 122 per cent YoY and 92 per cent QoQ. Additionally, 25 GW of solar projects were auctioned, a 229 per cent QoQ increase and a 2,957 per cent YoY rise. Priya Sanjay noted that the surge in tendering activity was driven by agencies adhering to defined targets and timelines.
