Q1 2018 saw commissioning of a record 3,766 MW (+100% over Q4 2017) of utility scale solar projects. Cumulative utility scale solar capacity has crossed the 20,000 MW mark and now stands at 21,331 MW.

Figure: Quarterly utility scale solar capacity addition, MW

Source: BRIDGE TO INDIA research

The record capacity addition came despite significant delays faced in many projects under SECI tenders in Maharashtra, Odisha and Andhra Pradesh. Karnataka accounted for more than 72% of the total capacity commissioned in the quarter. Completion of most of the previously delayed projects under SECI 920 MW and Karnataka 1,200 MW tenders was the major reason behind this increase in project commissioning. This coincided with a rush in completion of open access projects because of state’s attractive open access policy – offering exemptions from cross subsidy surcharge, transmission, wheeling and banking charges – expiring at the end of March 2018. An unprecedented 1,250 MW of open access projects, 92% of total open access capacity commissioned in Q1 2018, were commissioned in Karnataka.

We expect commissioning activity to slow down considerably over the next few quarters. This is due to a slowdown in new tender issuances during late 2016 and early 2017. As per our estimates, total utility scale capacity addition in 2018 would be only 6.3 GW (-25% over 2017). Activity should pick up again in 2019 with about 8 GW of new capacity expected to come online in the year.