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Addition to rooftop solar installations in India sequentially grew 53 per cent as the nation added 521 MW to its capacity in the June quarter of this year, a report said. India had seen an increase of 341 MW in its rooftop solar production during the March quarter, it further stated.

The ‘Mercom India Rooftop Solar Market Report Q2 2021’ said that rooftop installations in Q2 were the highest ever in a quarter. A total of 862 MW was added to rooftop solar capacity in the first half of the current calendar year 2021, marking a 210 per cent increase compared to the same period of last year.

“Installations in 1H have already surpassed the total rooftop solar capacity installed in all of 2020 (719 MW) when the market was severely affected by Covid-19 lockdowns," the report said.

As a result, the cumulative rooftop solar installations in the country reached 6.1 GW by second quarter of 2021, the report added. Rooftop solar installations accounted to 20 per cent of total solar additions in the country.

Considering the industry fared much better during the second wave of Covid-19, Mercom increased its forecast by 71 per cent this year.

Mercom has increased it demand forecast for rooftop solar demand this year by 71 per cent.
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Mercom has increased it demand forecast for rooftop solar demand this year by 71 per cent.

Among states, Gujarat had the most rooftop solar installations in Q2 accounting for about 55 per cent of installed capacity this quarter, followed by Maharashtra and Haryana.

If the market has no other adverse COVID-related events for the rest of the year, 2021 could be the second-largest year for rooftop solar after 2018, it added.

“The rooftop solar segment had a strong quarter, and demand is up. Finalising the net metering cap at 500 KW has removed uncertainty for installers and paved the way for future growth," said Raj Prabhu, CEO of Mercom Capital Group.

“However, haphazard rooftop solar policies across states and a lack of support from distribution companies are holding back the sector from realising its true potential to bring in new investment, create jobs and drive the clean energy economy forward," he added.

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In Q2 2021, more than 130 MW of rooftop solar projects were tendered, a decline of 69 per cent quarter-on-quarter, but a 46 per cent year-on-year increase, the Mercom report stated.

Major rooftop solar tenders issued this quarter came from Madhya Pradesh Urja Vikas Nigam, Jharkhand Bijli Vitran Nigam, Haryana Renewable Energy Development Agency, and West Bengal Renewable Energy Development Agency, it added.

In Q2 2021, the majority of the rooftop solar installations were in Gujarat, . Maharashtra and Haryana rounded off the top three states for rooftop solar in Q2 2021.

The industry witnessed a surge of demand from commercial and industrial (C&I) consumers even during the lockdown from the second wave of COVID-19. The first half of the year could have been much stronger if not for the uncertainty around net metering regulations. With regulatory certainty in place, demand is expected to pick up, though with smaller-sized installations, noted the report.

According to the report, in Q2, average rooftop solar system costs increased 3 per cent to 39.1 million/MW compared to 38 million/MW in Q1 2021. System costs have been rising since Q3 2020 due to increasing costs led by modules and other components, coupled with raw material shortages. Solar modules still make up for the majority of rooftop solar costs.

Even with rising costs, consumers are realising that solar is still cheaper than retail power tariffs, it added.

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There is significant concern over increasing costs compared to the prices quoted under state empanelment auctions. Failure or success of these installations will have a considerable impact on the future of the residential rooftop solar segment, noted the report. 

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