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India's solar industry saw a significant drop in capacity growth in the second quarter, with pv capacity expected to fall to 8.3 gigawatts for the whole of 2018, according to clean energy Research firm Mercom India Research.
The forecast drop is due to a slowdown in domestic tendering schemes caused by a drop in electricity prices to rs2.44 per kilowatt hour and India's imposition of a safeguard tax on imports of solar equipment from China and Malaysia.On the other hand, the levy of safeguard tax brings uncertainty to both the policy and the market, thus affecting the development of the project.
According to Raj Prabhu, CEO and co-founder of Mercom Capital Group, the market is expected to stagnate for the next three to six months, which will hinder the next bidding process, while solar installations are expected to remain unchanged in 2019.
Solar capacity was 1,599 megawatts in the second quarter, compared with 3,344 megawatts in the first quarter of 2018 and 2,025 megawatts in the same period last year.The drop reflects uncertainty related to friction in the solar trade, price instability in modules and the renegotiation of the power purchase agreement (PPA).
According to Mercom India's quarterly solar market analysis, the total installed capacity of the new power stations in production is 1,599 megawatts, about 1,184 megawatts are large installations, compared to 2,954 megawatts between January and March 2018.Meanwhile, roof photovoltaic (PV) capacity increased 84 per cent year on year.Overall, 74 per cent of the country's new solar parks are large installations, while 26 per cent are rooftop solar.
By the end of June, India had 24 photovoltaic installations.Six gigawatts, about 90 percent of which comes from large solar power stations.