India installed a record 10 gigawatt (GW) of solar capacity during calendar year 2021, registering a year-on-year rise of 212 per cent, according to Mercom India Research. The country had made 3.2 GW of solar capacity installations during 2020, the research firm said in its latest report.
Cumulative solar installed capacity in India was approximately 49 GW at the end of December 2021, the report titled ‘Annual 2021 India Solar Market Update’ said. “India added a record 10 GW of solar in 2021, the highest ever in a year. Solar accounted for 62 per cent of new power capacity additions in 2021, the largest share of power capacity ever,” it said.
During the year, large-scale solar projects accounted for 83 per cent of installations and saw a 230 per cent year-on-year (y-o-y) surge. Rooftop installations registered a y-o-y increase of 138 per cent in 2021. Rajasthan, Karnataka and Andhra Pradesh were the top three states for cumulative large-scale solar capacity accounting for 50 per cent of the installations in the country as of December 2021.
In 2021, Rajasthan led the capacity addition with 4.5 GW of solar capacity installation, the report further said. The demand outlook for 2022 is strong, but significant challenges await the industry, beginning with the basic customs duty, import restrictions, and the goods and services tax on top of global supply chain issues, and high component prices, said Raj Prabhu, CEO of Mercom Capital Group.
According to the report, the average project cost was also higher in 2021 due to higher module, raw material prices and freight charges. “In 2021, solar tenders dipped 4.3 per cent y-o-y and auctions fell 2.6 per cent compared to 2020. The delay in signing power-sale agreements (PSA) and lack of clarity regarding applicable duties were some of the reasons for the slowdown in tender and auction activity,” the report said.