India Adds Record 10-Gigawatt Solar Capacity in 2021, Research Shows

India installed a record 10 gigawatt (GW) of solar capacity during calendar year 2021, registering a year-on-year rise of 212 percent, according to Mercom India Research. The country had made 3.2 GW of solar capacity installations during 2020, the research firm said in its latest report. Cumulative solar installed capacity in India was approximately 49GW at the end of December 2021, the report titled 'Annual 2021 India Solar Market Update' said.

"India added a record 10GW of solar in 2021, the highest ever in a year. Solar accounted for 62 percent of new power capacity additions in 2021, the largest share of power capacity ever," it said.

During the year, large-scale solar projects accounted for 83 percent of installations and saw a 230 percent year-on-year (YoY) surge. Rooftop installations registered a YoY increase of 138 percent in 2021.

Rajasthan, Karnataka and Andhra Pradesh were the top three states for cumulative large-scale solar capacity accounting for 50 percent of the installations in the country as of December 2021.

In 2021, Rajasthan led the capacity addition with 4.5GW of solar capacity installation, the report further said.

The demand outlook for 2022 is strong, but significant challenges await the industry, beginning with the basic customs duty, import restrictions, and the goods and services tax on top of global supply chain issues, and high component prices, said Raj Prabhu, CEO of Mercom Capital Group.

According to the report, the average project cost was also higher in 2021 due to higher module, raw material prices and freight charges.

"In 2021, solar tenders dipped 4.3 percent YoY and auctions fell 2.6 percent compared to 2020. The delay in signing power-sale agreements (PSA) and lack of clarity regarding applicable duties were some of the reasons for the slowdown in tender and auction activity," the report said.