Kolkata: In calendar year (CY) 2023, India added 1.7 gigawatts (GW) of rooftop solar, up 3.7 per cent compared to 1.6 GW installed in 2022, according to the newly released report, 2023 Q4 & Annual Mercom India Rooftop Solar Market Report by Mercom India Research. Residential installations were the primary driver of capacity additions in 2023. However, growth was marginal as many commercial and industrial (C&I) consumers waited for module prices to stabilise to lower their capital investments.
The residential segment accounted for over half of the capacity additions in 2023, followed by C&I segments. In the fourth quarter (Q4) of 2023, 406 megawatts (MW) of rooftop solar was added, a 5.8% drop quarter-over-quarter (QoQ) from 431 MW in Q3 2023. Installations were down 15.9% year-over-year (YoY) compared to 483 MW in Q4 2022.
"Although rooftop solar experienced modest growth in 2023, there are significant upsides to this market. Rapidly falling system costs, increasing electricity rates, incentives for residential installations, and attractive return on investments for the C&I segment are all fuelling demand, which is expected to accelerate in 2024. The wait for prices to continually drop is over, and the resurgence in construction activity has begun," said Raj Prabhu, CEO of Mercom Capital Group.
Rooftop solar tenders totalling 1.2 GW were issued in 2023, down 45.7% YoY. Uttar Pradesh New Energy Development Agency drove tender activity in 2023, accounting for 44.2% of announced tender capacity. Tenders to add rooftop solar systems to government buildings across the country accounted for nearly 57% of the announced total solar tender capacity.
Gujarat added the most rooftop solar capacity in Q4 2023, accounting for 42.6% of the quarter's installations. The average cost of rooftop solar systems fell for the fifth straight quarter. In Q4 2023, average rooftop solar system costs fell 10% QoQ and 21.6% YoY. India's cumulative rooftop solar installations reached 10.5 GW at the end of Q4 2023.
Gujarat continues to be the leading state accounting for 27.3% of cumulative solar rooftop installations, followed by Maharashtra and Rajasthan, with 13.3% and 8.1%, respectively. The top 10 states accounted for 77.3% of cumulative rooftop solar installations as of December 2023. The government, too, is giving a lot of importance to the installation of solar rooftops. A few days ago, in a significant boost to solar energy adoption in the country, the Central government announced to provide a 60% subsidy for rooftop solar installations under the newly proposed Pradhan Mantri Suryoday Yojana. This marks an increase from the current subsidy of 40 per cent.
Read more: Explained | Solar Rooftop For Households: Target And Challenges
