419 MW of Open Access Solar Projects Installed in Q1 2021

Cumulative open access solar installations crossed the 4 GW mark in Q1 2021


India’s open access solar installations totaled 419 MW in the first quarter (Q1) of 2021, while the cumulative solar installations in the open access market have reached 4.3 GW as of March 2021. The numbers are revealed in Mercom India Research’s India Open Access Solar Market Update Q1 2021.

The report covers current policies related to the open access market, amendments, price trends, and emerging business models. The new report has expanded its outreach to include two new markets: Madhya Pradesh and Rajasthan.

The pipeline of projects under development and in the pre-construction phase under open access is estimated to be over 1 GW.

The report suggests that the open access market is providing an alternative opportunity for developers and investors who do not participate in auctions for large projects, considering they are highly competitive and limited to specific geographies. The developers can choose the customers to offtake the power they produce and earn an attractive return on investment. For distribution companies (DISCOMs), this measure works as a new avenue to bring private investment into the sector and address the shortage of electricity and encourage green power generation.

The report notes that as a result of delayed open access projects moving from 2020 to 2021, installations peaked in the first quarter of 2021, resulting in more open access projects in just one quarter compared to installations in the entire calendar year of 2020.

India Solar Open Access Market (Yearly vs Cumulative Installed Capacity)

As of March 31, 2021, Karnataka was the largest market for open access cumulatively, followed by Rajasthan, Madhya Pradesh, Andhra Pradesh, and Tamil Nadu.

Installation activities in Karnataka have slowed over the past two years. The top five states account for approximately 76% of the total open access solar market in India as of March 2021.

Open Access Installed Capacity Breakup By Major States (Cumulative)

In Q1 2021, Maharashtra was the top state for open access solar projects developed, accounting for 22% of the total installations during the quarter.

Policy consistency and visibility are the driving factors for open access solar. However, the report also found that the attractive policy in a state is not necessarily translating into growth in open access installations. According to the report, obtaining approvals is tough, and state agencies are allegedly creating hurdles in open access project implementation.

The average open access tariff in the states covered in this report ranged from ₹3.50-5.00 ($0.048- 0.068)/kWh with a yearly escalation of 1-2% depending on contract terms.

The procurement of power through short-term open access contracts is gaining popularity among consumers. Factors such as commitment to 100% clean energy goals by large corporates and meeting renewable purchase obligations are pushing for power procurement through short-term open access. Multinational companies (MNCs) with the strategy to go green are choosing the group captive model. These MNCs have strict norms to ensure the counterparty or the open access developer is financially strong and will stay invested for a longer duration. This has brought in demand for serious developers to sell power to these companies.

“There is huge pent-up demand for open access despite restrictive policies. With the right, consistent, supportive policies, a substantial amount of investment inflows can be unlocked,” commented Priya Sanjay, Managing Director of Mercom India. “The government’s proposal to cap net metering for rooftop solar at 500 kW is also leading many consumers with larger power demand to consider open access solar as a solution.”

For the complete report, visit: https://mercomindia.com/product/india-open-access-solar-market-update-q1-2021

Mercom recently published the Q1 2021 India Solar Market Update, which revealed that India added 2,056 MW of solar in Q1 2021 compared to 1,505 MW installed in the quarter before. This was a 37% increase quarter-over-quarter. Solar installations were up by 88% year-over-year compared to 1,090 MW added in Q1 2020.


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