Solar power installations hit hard by low tariffs

​Hyderabad: New lows in tariffs, price fluctuations, uncertainties around trade cases and race among new entrants has resulted in solar installations in India plummeting by 52 per cent. In an email interview to The Hans India, Praful Pathak, Secretary General, Solar Energy Society of India (SESI), said: “The solar sector in India is in a volatile condition. 

The drop in solar installations in Q2 2018 after four consecutive quarters of growth was expected and can be attributed to uncertainties around trade cases, module price fluctuations, and PPA renegotiations after record low bids, which contributed to a slowdown in tenders and auctions in 2017, resulting in a weaker project pipeline for 2018.”

A recent report on solar market by Mercom India Research titled 'Q2 2018 India Solar Market Update', the installations stood at 3,344 MW during the first quarter. The report also noted that the installations during the quarter under review were down nearly 21 per cent in comparison to 2,025 MW installed in the corresponding quarter of 2017. During the second quarter of 2018, large-scale installations totalled 1,184 MW as compared to 2,954 MW in the previous quarter and 1,800 MW in the corresponding quarter of previous year. 

Rooftop installations accounted for 415 MW during the quarter under review as against 390 MW during the previous quarter and 225 MW in second quarter of 2017, according to the report. 

"Rooftop installations have been growing robustly so far but are expected to slow down until module prices decrease after the safeguard duty impact wears off. Rooftop is extremely cost sensitive and an increase in project costs will slow down the installations. However, the market is expected to start growing again once module prices decline and negate the safeguard duty impact," the report said. 

Cumulative solar installed capacity totalled 24.6 GW at the end of the second quarter of 2018 with large-scale solar projects accounting for 90 per cent and rooftop solar making up the remaining 10 per cent. Mercom India Research is also forecasting solar installations of approximately 8.3 GW in 2018 with some upside, if the fourth quarter commissioning’s stay on schedule. 

"Due to uncertainty around the safeguard duty, auction activity in the first half of 2018 was weak, which will result in a smaller large-scale project pipeline for 2019. We expect the market to freeze for 3-6 months following the safeguard duty announcement," said, Raj Prabhu, CEO and Co-Founder of Mercom Capital Group.