India's solar capacity additions fell by nearly 47% in the first nine months of 2023 to 5.6 gigawatts (GW) compared to 10.5 GW installed in the same period of 2022, says a research report.

The main reason was a fall in utility-scale large capacity additions by 54% year on year to 4.2 GW, according to 'India Solar Market Update' by Mercom India Research, which tracks the global renewable energy sector. Extensions granted to several large-scale solar and hybrid power projects and those facing delays due to land and transmission issues primarily affected installations in 2023.

The changes in securing transmission connectivity increased with the change in project timelines. Lack of clarity on transmission connectivity issues compounded the delays. Further, several projects stuck in the habitats of the Great Indian Bustard (GIB) bird are also still waiting for the Supreme Court order to receive transmission connectivity (GIBs died of electrocution from transmission lines and courts directed project developers to find alternate solutions like underground transmission). India's cumulative installed solar capacity surpassed 69 GW as of September 2023, says the Mercom Research report.

Meanwhile, research agency ICRA says the installed renewable energy (RE) capacity excluding hydro energy in India will increase to about 170 GW by March 2025 from 135 GW as of December 2023. After that, the capacity addition is likely to be supported by the significant improvement in tendering activity in the current fiscal with over 16 GW projects bid out so far and another 17 GW bids underway by the Central nodal agencies. ICRA says the rise in the renewable energy (RE) capacity over the next five-six years is estimated to enhance the share of RE plus large hydro in the all-India electricity generation from about 23% in FY2024 to around 40% in FY2030.

The sharp decline in solar PV cell and module prices, abeyance of the Approved List of Module Manufacturers (ALMM) order till March 2024 and the timeline extension approved for solar and hybrid projects are expected to lead to an improvement in RE capacity addition to 18-20 GW in FY2024 from 15 GW in FY2023. This is likely to support the scale-up in capacity addition to 23-25 GW in FY2025. The Government plans to bid out about 50GW of renewables every year to fast-track capacity addition.  However, challenges remain on the execution front concerning delays in land acquisition and transmission connectivity, which could hamper the capacity addition prospects, warns ICRA.  

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