Project Delays See India’s Solar Capacity Additions Plummet by 44% in 2023: Report

India installed 7.5 gigawatts (GW) of solar capacity in the calendar year (CY) 2023, a 44.1% decrease year-over-year (YoY) from 13.4 GW installed in CY 2022, according to recently released Q4 & Annual 2023 India Solar Market Update by Mercom India Research.

In 2023, large-scale solar installations fell 50.8% YoY to 5.8 GW from 11.7 GW in 2022. Large-scale solar accounted for 77.2% of the annual capacity additions, and rooftop solar contributed 22.8%.

In Q4 2023, India added 1.8 GW of solar capacity, a 6.6% drop from 1.9 GW installed in Q3 2023. Installations fell 41.3% from. 3.1 GW in Q4 2022. Large-scale solar projects contributed 77.4% to the quarter’s capacity additions, and rooftop solar 22.6%. As of December 2023, the cumulative installed solar capacity stood at 72 GW.

Delayed large-scale projects auctioned by Solar Energy Corporation of India (SECI), NHPC, NTPC, and Indian Renewable Energy Development Agency (IREDA), which were granted extensions between December 2022 and June 2023, would likely contribute significantly to capacity additions in 2024, raising the annual installation numbers.

Average large-scale solar system costs dropped through 2023. Q4 2023 recorded the lowest-ever quarterly average project cost since the onset of large-scale solar capacity additions in the country. Average large-scale system costs in Q4 2023 fell 14.3% quarter-over-quarter (QoQ) and 26.6% YoY.

Rajasthan, Karnataka, and Gujarat were the top three states for cumulative large-scale solar capacity, accounting for 54.8% of installations in the country as of December 2023.

Priya Sanjay, Managing Director of Mercom India said: Module price drops in Q3 led to increased orders, but grid compliance and last-minute connectivity issues due to new regulations caused project commissioning delays.”