India's Rooftop Solar Installations Decline Amid Rising Costs

India's rooftop solar capacity installations declined by 26% year-on-year to 367 MW in Q1 2024, primarily due to rising input costs and delays in application processing. The industrial sector led the capacity additions, while the states of Gujarat, Maharashtra, Haryana, Kerala, and Karnataka accounted for a significant portion of the new installations.

Rooftop solar capacity installations in India registered a 26 per cent year-on-year decline to at 367 megawatts during January-March period, mainly on account of rise in input cost, according to Mercom Capital.

The country had witnessed 485 megawatt (MW) of rooftop solar installations during the first quarter of 2023, the research firm said in a report on Friday.

India added 367 MW of rooftop solar in the March quarter. Installations fell nearly 10 per cent quarter-over-quarter from 406 MW and dropped over 24 per cent year-on-year from 485 MW, the report titled 'Q1 India Rooftop Solar Market' said.

India's cumulative rooftop solar capacity was 10.8 GW as of March 2024.

''The drop in installations was largely a result of application processing delays faced by residential customers due to oversubscription under the PM SURYA GHAR: MUFT BIJLI YOJANA programme. The rise in module prices to comply with domestic content requirements (DCR) further contributed to reduced capacity additions under the SURYA Gujarat program,'' it said. The industrial segment led quarterly capacity additions, comprising almost 57 per cent of installations. Commercial, residential, and government segments accounted for around 28 per cent, 14 per cent, and 1.1 per cent of capacity additions, respectively.

Mercom Capital Group CEO Raj Prabhu said, ''Although rooftop solar is off to a slow start, 2024 could be a breakout year if the government's residential rooftop programme with attractive incentives. The challenge is on the supply side, a short supply of inverters and certain components, availability of skilled labor, and concerns over the ability of installers and government agencies to handle the rush is keeping the sector up at night.'' Gujarat, Maharashtra, Haryana, Kerala, and Karnataka led in the rooftop solar additions in the quarter. The top-five states accounted for more than 67 per cent of the quarter's installations.