BRIDGE TO INDIA has released the latest edition of its India Solar Rooftop Map report. As per the report, India added new rooftop solar capacity of 840 MW in the 12 months ending September 2017. Total installed capacity as of September 2017 stood at 1,861 MW. The sector has grown at a CAGR of 83% from 2013 to 2017 but growth in 2017 is expected to slow down to 60%.
- OPEX market share has risen to 30% from 19% in 2016 driven by higher capital availability and rapid scaling up by new players;
- Maharashtra has overtaken Tamil Nadu to emerge as the biggest solar rooftop state with an 18% annual market share;
- We are revising downwards our projection for total rooftop solar capacity addition by 2021 to 10.8 GW (-18%);
Our revised estimate for expected capacity addition in 2017 is 887 MW, 28% lower than our previous estimate. We attribute slower than expected growth to multiple factors – the anticipated boom in public sector segment has failed to materialize, sharp increase in module prices has slowed down pipeline with customers postponing investment decisions and net metering implementation is still a challenge in many states. We have revised our projections for the next five years with total estimated capacity addition of 10.8 GW by 2021 (down 18% over our previous estimate).
Commercial and industrial (C&I) consumers remain the biggest market segment accounting for 63% of total capacity and 66% of new capacity added in the last 12 months. Capacity addition in this segment grew at 86% in the 12 months. These consumers are driven by attractive savings of 20-50% offered by power from rooftop solar in comparison to grid power as well as growing capacity of OPEX providers such as CleanMax, Amplus and Cleantech Solar. Private capital is flowing more easily to this market – CleanMax raised equity capital of USD 70 million from Warburg Pincus and IFC and many more international utilities and PE investors are looking actively at entering this market. Rapid growth in the C&I segment has also helped in Maharashtra becoming the biggest rooftop solar state, leapfrogging Tamil Nadu, by adding new capacity of 148 MW (18% market share) in the last year.
Residential rooftop solar grew at a more sedate pace of 45%. But the major disappointment is low uptake in the public sector, which added only 173 MW in the last 12 months against our estimate of 200 MW. The Government of India is providing capital subsidies of up to 25% for building rooftop solar systems across all government facilities and identified total potential of over 7 GW. But progress has been slow because of complicated tender based allocation process and execution challenges. It is noteworthy that SECI’s 1,000 MW public sector rooftop tender, launched in December 2016, was subsequently scaled back to 500 MW and the final allocation, made one year after tender issue date, is only 226 MW.
In terms of market performance, CleanMax (15.8%), Cleantech Solar (15.0%), Amplus (9.5%), ReNew (8.9%) and Azure (6.6%) are the clear leaders in OPEX category. Delta (30.6%) and SMA (20.6%) have maintained their dominance in the inverter market but we expect SunGrow, Huawei, SolarEdge and Fronius to compete aggressively in future. The EPC sector, on the other hand, is getting ever more fragmented. Tata Power Solar is the clear market leader (6.2%) but it has lost market share. Combined market share of top ten EPC players is only 20%.
It is heartening to see rooftop solar market growing briskly but we believe that it is still performing below its potential. The government policy stance, apart from providing capital subsidies, has been lacklustre and much more needs to be done to improve net metering, support DISCOMs and launch customer awareness and quality assurance initiatives.
