In the context of domestic solar installation, India has just passed through a record-breaking financial year. FY2021-22 saw 13.9 GW of solar installation in India. It is the first time when annual (FY) solar installation of India crossed 10 GW capacity. The fact that FY2022 solar installation grew by 2.6 times over that of the previous year is undoubtedly impressive.
Also noteworthy is that solar capacity addition of FY2022 alone contributes 26% to the cumulative installed solar capacity (54GW) (as of FY2022). Albeit a significant part of the FY2022 solar capacity addition can be attributed to projects that were scheduled to get commissioned by FY2021 but got delayed due to COVID-19-induced pandemic.
Of the 13.9GW of solar installation added in FY2022, utility-scale segment has a share of 73%. This is followed by rooftop (16%) and off-grid (11%) segments.
Further, as per JMK Research estimates, we expect about 16 GW of solar installation in the current financial year i.e., FY2023.
Figure 1: Annual Installed Solar Capacity Trend (FY2015-FY2022) And Forecast For FY2023
Source: CEA, JMK Research
Among all the states and union territories of India, Rajasthan added maximum solar capacity in FY2022, contributing nearly half (49%) of all solar capacity addition in FY2022. At 20% share, Gujarat saw 2nd highest solar capacity addition. The next set of states with significant capacity addition are Tamil Nadu, Telangana, Uttar Pradesh and Haryana, each having a share of ~4% in FY2022 solar installation.
Figure 3: State-wise Distribution of FY2022 Solar Capacity Addition
Source: MNRE, JMK Research Note: Capacity figures shown in the chart signifies overall solar installation which includes grid-connected utility-scale and rooftop solar capacities as well as off-grid solar capacity.
At 54 GW (as of March 2022), India is still a long way from 100 GW target by December 2022. Furthermore, it faces new and increasingly relevant headwinds such as commodity price fluctuation, higher cost of solar equipments (owing to hike in taxes and duties).
But, despite these challenges, various (direct and indirect) driving factors, viz. surging power demand, boost in awareness of ESG (Environmental, Social, Governance) issues, and uncertainties related to supply of conventional energy sources such as coal, gas, etc., is expected to catalyse the growth of solar installation in the medium term.
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