Rooftop Solar Segment Emerging As Game-Changer In India’s Renewable Space

Finally, the rooftop solar segment in the country seems to be catching up, and not just catching up, but growing by leaps and bounds. There has been a significant increase in rooftop solar installations in the first nine months of this year. In fact, the pace has surpassed annual installations of all previous years. That’s not all. For the first time, the residential sector is outpacing commercial and industrial users and the corresponding consumption levels. India added a record 1.9 gigawatts (GW) of rooftop solar capacity in the first nine months (9M) of the calendar year (CY). Installations in the first nine months surpassed even annual installations of all previous years.

Installations rose nearly 45 per cent year-over-year (YoY) compared to the 1.3 GW installed in 9M 2023. That’s what the latest report from Mercom India on: Q3 2024 India Rooftop Solar Market suggests. The rooftop solar market has seen a remarkable turnaround, thanks to the PM–Surya Ghar initiative, that’s what experts feel. The residential sector is now at the forefront of this growth.

What should be remembered at this point is that in order to sustain the unprecedented growth, it is critically important to address supply chain challenges that keep cropping up. In the third quarter (Q3) of 2024, a record 791.1 MW of rooftop solar capacity was installed, marking the highest quarterly additions to date. This represents over eight per cent increase quarter-over-quarter (QoQ) and an impressive 84 per cent year-over-year (YoY) growth. There is no doubt whatsoever that installations in Q3 and 9M 2024 were primarily driven by the PM - Surya Ghar: Muft bijli yojana initiative. There is no denying that this programme significantly boosted capacity additions in the residential segment, contributing nearly 85 per cent of installations during the quarter.

Compared to residential rooftop solar segment, the industrial segment accounted for 12 per cent of the quarter's installations. Commercial and government segments accounted for over two per cent and almost one per cent of capacity additions, respectively, in Q3 2024. Rooftop solar capacity additions under the capital expenditure (CAPEX) model, on its part, accounted for almost 89 per cent of the quarter's installations.

Significantly, as of September, India had a cumulative installed rooftop solar capacity of 12.4 GW. Down south, Kerala registered the highest compounded quarterly growth rate of more than eight per cent between Q3 2023 and Q3 2024. In Q3 2024, 371.1 MW of rooftop solar tenders were issued, which is down by more than 30 per cent from 533.6 MW in Q2 2024 and up by over 211 per cent compared to the 119.3 MW announced in Q3 2023.

Coupled with these facts and figures, one also has to keep in mind that the average cost of rooftop solar systems rose almost two per cent QoQ and was down more than three per cent YoY. With a little bit of extra push, rooftop solar segment can turn out to be a true game-changer in the Indian renewable space, going forward.