Month in a Minute: Top Headlines from the Indian Renewable Sector in November 2023

India’s solar installations drop by 47% YoY in 9M 2023


Here is a recap of important headlines from November 2023:

In the first nine months of 2023, India has installed 5.6 GW of solar power capacity, marking a ~47% year-over-year (YoY) decrease from 10.5 GW. The utility-scale solar project installations totaled 4.2 GW, a 54% YoY decline. The numbers were reported in Mercom India Research’s recently published Q3 2023 India Solar Market Update. Managing Director of Mercom India, Priya Sanjay, said, “Many projects have been granted extensions, with deadlines stretching until March 2024 and beyond, reducing the immediate urgency for installation.” She said healthier numbers are expected in Q1 of 2024.

Solar power accounted for 16.44% of the total installed power capacity and 39.4% of the total installed renewable capacity in the second quarter of 2023, marginally up from 15.9% and 38.4% in the previous quarter. India’s installed renewable energy capacity, including large hydropower projects, stood at 177.1 GW, making up for 41.8% of the overall power capacity at the end of the quarter, according to data from the Central Electricity Authority, Ministry of New and Renewable Energy, and Mercom’s India Solar Project Tracker.

The Haryana government has unveiled the ‘Draft Haryana Solar Power Policy 2023,’ aiming for 6 GW of solar power installations by 2030. This target comprises 3.2 GW of ground-mounted capacity, 1.6 GW of rooftop solar, and the solarization of 1.2 GW of irrigation pumps. Power distribution companies can set aside 20% of the ground-mounted solar capacity for small generators of up to 2 MW. They can issue separate tenders for this reserved capacity, and the tariff for small generators will be determined based on the bids.

Karnataka Electricity Regulatory Commission has approved an additional surcharge of ₹1.40 /kWh (~$0.017) for consumers availing power through open access for the financial year 2023-24. The Commission has brought down the additional surcharge for all open access consumers procuring electricity from renewable sources from ₹1.48 (~$0.018)/kWh to ₹0.70 (~$0.0084)/kWh. The additional surcharge does not apply to captive consumption. The additional surcharge already paid by open access consumers will be adjusted, and the difference will be paid to or received from the power distribution companies.

The Maharashtra Electricity Regulatory Commission has increased the banking charges for green energy open access consumers to 8% of the energy banked from 2%. Following the Electricity Act 2003 and the Tariff Policy 2016, the Commission has enacted amendments to the Maharashtra Electricity Regulatory Commission (Distribution Open Access) Regulations, 2016. These changes, outlined in the (Second Amendment) Regulations, 2023, address recent sectoral developments, including amendments to the Electricity (Promoting Renewable Energy Through Green Energy Open Access) Rules, 2022.

Solar cell and module exports from India surged 246% to $543.8 million (~₹45.5 billion) in Q3 of 2023 from $157 million (~₹12.5 billion) in Q3 2022, according to recent data published by the Department of Commerce. Exports were up by 17% quarter-over-quarter from $463.8 million (~₹38.1 billion). The U.S. remained the top export destination in Q3 2023, accounting for 97.2%. Exports to the U.S. increased by 15.8% QoQ.

Foreign Direct investment (FDI) in India’s renewable energy sector saw a rise of 9% YoY in the Q2 of FY 2023-24. FDI in renewables stood at $504.08 million (~₹42.01 billion) in Q2 compared to $461.51 million (~₹38.26 billion) in the same quarter last year, according to Ministry of Commerce and Industry data. The amount was, however, down 31% quarter-over-quarter from $737.17 million (₹60.73 billion). The market segments that witnessed the most investment flow during the quarter were solar, pumped hydro storage, and wind projects, mostly through the automatic route.

India installed over 1.3 GW of rooftop solar capacity in 9M 2023, an increase of 12% YoY, according to Mercom India Research’s newly released Q3 2023 Mercom India Rooftop Solar Market Report. India added 431 MW of rooftop solar capacity in Q3 of 2023, up 34.7% YoY. The installations also saw a quarter-over-quarter increase of 11.4% from 388 MW. India’s cumulative rooftop solar capacity reached 10.1 GW at the end of Q3 2023.

India generated approximately 27 billion units (BU) of solar power in Q3 2023, up 19% YoY, according to the data published by the Central Electricity Authority. The country’s solar power generation fell 12.1% QoQ after hitting a record high in Q2, as the seasonal monsoons dampened generation. Rajasthan, Karnataka, and Tamil Nadu recorded the highest solar power generation QoQ, with 9.5 BU, 3.4 BU, and 3.1 BU, respectively. However, solar generation in the top three states fell 7.2%, 15.3%, and 10.7% QoQ.

The Maharashtra Electricity Regulatory Commission has increased the net metering cap for rooftop solar power projects to either 5 MW or the consumer’s contract demand/ sanction load, whichever is lower. Net metering in the state was earlier capped at less than 1 MW. The increase in the net metering cap comes across as an effort to encourage the adoption of commercial and industrial rooftop installations. The Commission has also allowed consumers to opt for group net metering, net billing, or behind-the-meter connection.

Rajasthan Electricity Regulatory Commission has approved a ceiling tariff of ₹3.55 (~$0.043)/ kWh for solar power projects to be set up under Component C of the Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan program for feeder-level solarization. The Commission directed distribution companies (DISCOMs) to apply the specified ceiling tariff in their upcoming bids. However, before each future bidding, DISCOMs should consistently assess market conditions.

The Uttar Pradesh Electricity Regulatory Commission has amended the rooftop solar grid-interactive system gross/net metering regulation of 2019, extending the net metering facility to government and private educational institutions. Until now, the net metering option was available only for private tube wells and metered domestic consumers. The broadened coverage of the net metering facility is expected to benefit approximately 200,000 consumers falling under the Low Medium Voltage (LMV)-4A for public institutions, LMV-4B for private institutions, and High Voltage (HV)-1 categories, with a collectively sanctioned load of about 2,800 MW.

India added 412 MW of wind power capacity in the third quarter of the calendar year 2023, representing a 53% YoY dip, according to Mercom India Research. The installations were down 64% QoQ from 1,139.9 MW. The decline resulted from leading wind energy states like Karnataka and Rajasthan failing to register any installations during the quarter.

The Ministry of Mines has invited bids for the grant of concessions for 20 critical mineral blocks across seven states and one union territory. The selection of eligible bidders will be based on the highest percentage of the value of mineral despatched quoted by them. The last date for the submission of bids is January 22, 2024. The tender document and applicable GST are priced at ₹300,000 (~$3,600). The total area allocated for the first-ever critical minerals auction is 463.995 hectares. The Ministry has identified four mineral blocks for mining leases and 16 mineral blocks for composite licenses, intending to conduct an electronic auction. The critical minerals essential for renewable energy listed in the auction include Lithium, Bauxite, Graphite, Nickel, Chromium, Copper, Manganese, and Molybdenum Ore.

The Bureau of Energy Efficiency has issued the draft Detailed Procedure for Compliance Mechanism under the Carbon Credit Trading Program. Under the new procedure, the Ministry of Environment, Forest and Climate Change will announce the greenhouse gas emission intensity targets for tons of carbon dioxide equivalent per unit of equivalent product for each defined trajectory cycle applicable to obligated entities.