India’s utility-scale solar addition to slow in 2023

The sector saw a record-high 14GW additions in 2022.

Utility-scale solar addition in India is expected to slow down by almost 20% in 2023 due to the lower auction volume and supply chain challenges but could potentially recover in 2024, according to the International Energy Agency (IEA).

In a report, the IEA noted that India saw a record 14-gigawatt (GW) utility-scale solar capacity addition, mainly from the capacity awarded in auctions in 2022, comprising over two-thirds of the increase in renewable energy in the country.

India’s auction volumes in 2022 declined by a third as only 10GW alternate current were issued, which is the lowest amount awarded since 2017 and is below the volumes need to meet the national target of 500 GW non-fossil fuels capacity by 2030.

READ MORE: India’s RE capacity reaches 301GW

Distribution companies with poor financial health were discouraged from entering into contracts as the average tariffs for solar PV auctions in 2022 were 21% higher year-on-year.

“In addition, some states that had fulfilled their Renewable Purchase Obligations neglected to organise further auctions, and federal agencies were putting more emphasis on hybrid tenders,” it said. 

Despite this, the country’s renewable capacity additions are seen to increase in 2023 and 2024 on the back of faster installations of onshore wind, hydropower and distributed solar.