Consolidation underway in solar EPC market

04 December 2019 |

India’s utility scale solar capacity reached 29.7 GW by September 2019, growing 25% y-o-y. A review of the EPC data shows two interesting trends. Contrary to popular perception, share of third-party EPC contractors is increasing and touched 77%, highest in the last five years. Second, there is increasing consolidation in the EPC market as many regional and smaller players have been edged out of the utility scale projects business.

Figure: Share of third-party EPC in commissioned projects (utility-scale solar)

Source: BRIDGE TO INDIA research
Note: Data above pertains to commissioned projects only.

Over the years, most leading developers, particularly Indian corporate houses (Adani, Hero, Acme, Tata Power, Shapoorji Pallonji, amongst others) and private equity backed platforms (ReNew, Azure and Mytrah) have shown a strong preference for bringing EPC work in-house. Faced with falling tariffs, they have tended to use internal resources for project execution to cut costs and improve project returns. However, two factors have led to a reversal in this trend. The EPC market itself has been intensely competitive with sharp fall in costs and wafer-thin margins. There is little cost advantage, therefore, in self-EPC. Indeed, some of the developers keen on self-EPC previously are beginning to consider third party services. Meanwhile, most of the international developers including SB Energy, Engie, Enel, Fortum continue to prefer outsourcing EPC work. Increase in their share of the project pipeline has led to an increase in use of third-party EPC services.

As project sizes have become larger and margins have been eroded, smaller EPC service providers have found it tough to sustain operations. These changes have benefitted larger players such as Sterling & Wilson, Tata Power, L&T and Mahindra Susten who find it relatively easy to raise capital, diversify internationally, benefit from economies of scale and maintain a healthy order book. Many of these players have also diversified into long-term operation and maintenance (O&M) and/ or asset management services to become fully integrated turnkey solution providers.


Recent reports

India PV Module Intelligence Brief – Q1 2022   

This report captures quarterly trends in module demand and supply, import and domestic production volumes, supplier market shares, break-up by technol...

Buy Report

India Corporate Renewable Brief | Q1 2022   

Our latest edition of quarterly report provides a detailed regular update on key trends and developments in the C&I renewable market....

Buy Report Download Executive Summary

India Solar Compass Q1 2022   

This report provides a detailed update of all key sector developments and trends in the quarter – capacity addition, leading players, tenders and po...

Buy Report Download Executive Summary

Technical Standards For Balance of Systems In Solar Projects

India’s solar capacity has grown from just 10.5 GW to 52 GW in the last five years and the country has adopted ambitious target of building 280 GW s...

Download

India PV Module Intelligence Brief – Q4 2021   

BRIDGE TO INDIA has released a new quarterly report, India PV Module Intelligence Brief, capturing ongoing demand-supply, pricing, technology and poli...

Buy Report

Solar pumps – waiting to take off   

The government has set a target to install 2 million off-grid and 0.75 million grid connected agricultural solar pumps by FY 2023. However, progress h...

Buy Report Download Executive Summary
Award winnig research
We use cookies to offer you an optimal user experience and collect information on website usage.