New capacity in the Indian solar market fell 9% to 1.5GW in Q2

According to Mercom India Research's latest Q2 2019 Indian Solar Market Update report, solar installations in India declined slightly in Q2 2019 to 1,510 MW, down 14% QoQ and 9%
YoY.

India added 3.
2 GW of solar capacity in the first half of 2019, with mega-projects accounting for 83% and rooftop installations accounting for 17%.

Installations decreased by 35%
compared to the 5.
1 GW increase in the first half of 2018.

Rooftop solar installations grew 11% sequentially to 292 MW in the second quarter of 2019, compared to 263 MW
in the first quarter of 2019.
The rooftop market recovered slightly after the election, but rooftop installations fell 30%
year-on-year compared to the 415 MW installed in the second quarter of 2018.

"It was a tough quarter for the Indian solar market, exacerbating tough lending conditions
.
After the election, we expect things to be slightly better in the second half of the year, but liquidity issues need to be addressed to regain momentum in the market," commented
Raj Prabhu, CEO and co-founder of Mercom Capital Group.

The report attributed the decline in solar installations in the second quarter of 2019 to the slowdown of rooftop solar installations and the commissioning phase of some solar projects
.

According to reports, the cumulative installed capacity of large-scale solar energy reached 31.
5 GW at the end of the second quarter of 2019, of which large-scale solar projects accounted for 88% and rooftop solar accounted for the remaining 12%.

Mercom India Research predicts that India will install more than 8 GW of solar capacity
in 2019.
The report estimates that based on current market dynamics, India's installed solar capacity will reach 70 GW by the end of 2022, well below the government's target
of 100 GW.

In the first half of 2019, India's total electricity generation increased by 8 GW
.
Among them, renewable energy accounted for nearly 58% of new installations, solar energy accounted for 41% of new installations, and wind energy accounted for 15%.

Coal accounted for nearly 42%
of new capacity.

Rajasthan was the largest state state with new large-scale solar capacity in the second quarter of 2019, followed by Madhya Pradesh, Andhra Pradesh, Tamil Nadu and Gujarat
.
Large solar installations are concentrated in these five states, accounting for 94%
of installed capacity in the quarter.

"The Andhra Pradesh government's move to renegotiate and revisit the solar PPA has upset the sector and dampened investor sentiment
.
Currently, the industry is awaiting a ruling from the court, which, if successful, will help remove uncertainty in the market," Prabhu added
.

In addition, factors such as the setting of the government's bidding ceiling for large-scale projects, land acquisition difficulties, import protection taxes, and weak transmission and distribution infrastructure still pose challenges to solar projects
.