India is estimated to have added new rooftop solar capacity of 1,836 MW in FY 2018-19, up a remarkable 61% over previous year. Total installed capacity is estimated at 4,375 MW as on 31 March 2019. Due to negative growth in utility scale solar over the last year, rooftop solar’s share of the total solar market has shot up to a very respectable 28% (11% in the previous year).
- Rooftop solar has very attractive growth potential with none of the financing or operational challenges associated with utility scale solar;
- The market place is extremely price sensitive and many players are struggling to survive;
- The policy stance needs to turn accommodative to reap full benefits of this highly compelling energy source;
The latest data compilation exercise completed by BRIDGE TO INDIA shows some interesting market trends. Maharashtra, Rajasthan and Gujarat are the three biggest states by annual installation and growing strongly. In contrast, Tamil Nadu, Karnataka, Telangana and Punjab have slowed down relatively due to a mix of policy and market related factors.
The market place is highly dynamic with huge churn in player rankings (see table below). Tata Power remains the largest EPC contractor but large corporates continue to lose market share due to high cost base and inability to offer any product or technology differentiation. Small, specialist players including Sunsure, Sunshot, Fourth Partner, Solar Square are performing relatively much better. The market is operating at wafer-thin margins with many players struggling to survive and system quality a frequent victim. Share of unorganised players has reached an all-time high of 57%.
Table: Top players in India rooftop solar
Source: BRIDGE TO INDIA research
Note: These rankings have been determined on the basis of capacity installed in FY 2018-19.
The OPEX market share has increased marginally to 37% from 34% in the previous year. Cleantech Solar has retained its lead status. There are three new players in the top ten rankings – Fourth Partner, Sunsource and TEPSOL (a subsidiary of Think Energy Partners). Again in the inverter market, the leader (Delta) has retained its position but there is high churn with the Chinese players increasingly dominating this market at the cost of their European peers.
Looking to the future, the market faces some significant hurdles. First, the DISCOMs increasingly see rooftop solar as a threat and are militating against it. The policy stance is turning hostile as states attempt to pull back from free net metering. The central government, meanwhile, seems to have disregarded rooftop solar in its push for ever increasing targets. Uncertainty persists about the INR 118 billion (USD 1.7 billion) SRISTI scheme, which has a target of installing 26 GW in three years. Second, in a market where low price rules the roost, there are growing fears about sub-standard installation quality. As these systems age, their poor performance is likely to lead to a consumer backlash. Finally, uptake in residential and SME segments continues to be low due to poor consumer awareness and financing constraints.
As we wrote six months ago, lack of government policy initiative is a missed opportunity. Rooftop solar has very attractive growth potential with none of the financing or operational challenges associated with utility scale solar.
