India added 1.7GW of rooftop solar in 2023 shows report

India added 1.7GW of rooftop solar in 2023, up 3.7% compared to 1.6GW installed in 2022, according to the latest report by Mercom India Research.

The 2023 Q4 & Annual Mercom India Rooftop Solar Market Report noted that residential installations were the primary driver of capacity additions in 2023. However, growth was marginal as many commercial and industrial (C&I) consumers waited for module prices to stabilise to lower their capital investments.

The residential segment accounted for over half of the capacity additions in 2023, followed by C&I segments.

In the fourth quarter (Q4) of 2023, 406MW of rooftop solar was added, a 5.8% drop quarter-over-quarter from 431MW in Q3 2023. Installations were down 15.9% year-over-year compared to 483MW in Q4 2022.

"Although rooftop solar experienced modest growth in 2023, there are significant upsides to this market. Rapidly falling system costs, increasing electricity rates, incentives for residential installations, and attractive return on investments for the C&I segment are all fuelling demand, which is expected to accelerate in 2024. The wait for prices to continually drop is over, and the resurgence in construction activity has begun," said Raj Prabhu, CEO of Mercom Capital Group.

Rooftop solar tenders totalling 1.2GW were issued in 2023, down 45.7% year-over-year. Uttar Pradesh New Energy Development Agency drove tender activity in 2023, accounting for 44.2% of announced tender capacity. Tenders to add rooftop solar systems to government buildings across India accounted for nearly 57% of the announced total solar tender capacity.

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Gujarat added the most rooftop solar capacity in Q4 2023, accounting for 42.6% of the quarter's installations.

The average cost of rooftop solar systems fell for the fifth straight quarter. In Q4 2023, average rooftop solar system costs fell 10% quarter-over-quarter and 21.6% year-over-year.

India's cumulative rooftop solar installations reached 10.5GW at the end of Q4 2023.

Gujarat continues to be the leading state, accounting for 27.3% of cumulative solar rooftop installations, followed by Maharashtra and Rajasthan, with 13.3% and 8.1%, respectively.

The top 10 states accounted for 77.3% of cumulative rooftop solar installations as of December 2023.
A comprehensive analysis of net metering policies across all Indian states and Union Territories is also included in the report.

Solar power has become an increasing part of India's energy mix. According to think tank Ember, solar’s share in India’s power generation mix has begun to rise significantly since crossing the 1% of generation mix point in 2018 and is now entering an accelerating growth phase.

In FY2023, solar and storage costs were reduced significantly, with recent successful bids indicating levelized costs as low as 4.04-4.34 Rs/kWh.