664% Year-Over-Year Growth in Open Access Solar Installations in Q2 2021

Cumulative open access solar installations reached 4.54 GW as of June 2021


India’s solar open access installations totaled 209 MW in the second quarter (Q2) of 2021, a 664% year-over-year (YoY) increase compared to 27 MW in the same period last year, according to Mercom’s India Solar Open Access Market Report Q2 2021.

Uttar Pradesh added the largest solar open access capacity in Q2 2021, followed by Chhattisgarh and Maharashtra. The top three states accounted for 83% of installations in the quarter.

Cumulative installations in the solar open access market have reached 4.5 GW as of June 2021.

Installations in Q2 declined 50% compared to the previous quarter (419 MW ) due to the impact of the second wave of COVID-19. However, they are expected to increase with over 1.1 GW projects in the pipeline. The government is promoting green open access under the ‘Draft Electricity (Promoting Renewable Energy Through Green Energy Open Access) Rules, 2021.

The solar open access market installed 628 MW of capacity in the first half (1H) of 2021, a 12-fold growth compared to 47 MW installed in the same period last year. Uttar Pradesh led the way with the highest installations in 1H 2021, followed by Maharashtra and Tamil Nadu.

According to the report, Uttar Pradesh, Rajasthan, and Chhattisgarh currently have conducive open access policies. The commercial segment also has potential for captive open access projects in Maharashtra.

Mercom India Solar Open Access Market Report Q2 2021As of June 30, 2021, Karnataka is the largest market for solar open access cumulatively, followed by Rajasthan, Madhya Pradesh, Andhra Pradesh, and Tamil Nadu. The top five states account for 73% of the total solar open access market in India.

State-wise Solar Open Access Installations in Q2 2021 (%)

According to the report, the demand for procuring renewables in the open access market has increased every quarter. Many corporates are trying to meet their power demands through renewable energy sources.

However, regulatory inconsistency and policy U-turns have hindered the growth of the open access market. State governments are also levying new charges or increasing the existing charges to avoid losing high-paying consumers.

Open access project developers believe uniform regulations across states and long-term policies without retroactive changes and charges are necessary for the market to scale.

The average open access tariff in the states covered in this report ranged from ₹3.50 to ₹5.00 ($0.047- 0.068)/kWh with a yearly escalation of 1-2% depending on contract terms.

“DISCOMS need to realize that the demand for renewables cannot be curtailed and have to reconsider the consumer’s right to combatting climate change and choosing their suppliers of power. The power demand from commercial and industrial entities is growing, and eventually, the states will have to invest in new power generation. On the other hand, open access will not only generate revenue without DISCOMs investing but also bring in huge capital from around the globe,” said Priya Sanjay, Managing Director of Mercom India.

The report also provides insight into short-term transactions such as day-ahead market (DAM), bilateral contracts, and real-time market (RTM) within the open access segment. The top five states are compared based on the electricity sold and purchased through each model.

Uttar Pradesh was the top seller in the DAM market in Q1 2021, while Gujarat was the leading purchaser in the DAM market in Q1 2021. The top markets for real-time and bilateral markets are covered in the report.

C&I entities are trying to meet a significant portion of their power demand through renewable energy sources with global commitments like RE100, Science-Based Targets initiative (SBTi), and environmental, social, and governance (ESG). Lack of sufficient space to meet a more significant percentage of power demand has led many corporates to opt for open access. The need for procuring renewables in the open market has only been growing every quarter, the report noted.


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