India’s residential rooftop solar capacity to increase by around 60% in FY2023: Report

India’s residential rooftop solar capacity will increase by around 60 per cent in the financial year 2023, according to a report by the Institute for Energy Economics and Financial Analysis (IEEFA) and JMK Research & Analytics.

The increasing need for cost savings and growing awareness among residential consumers, along with a strong push by the central government, is helping accelerate the pace of rooftop solar installations in India’s residential segment, it said.

“India has more than 300 million households and is endowed with abundant sunshine almost throughout the year, with an annual average of 300 sunny days. This shows that the potential for rooftop solar installations in residential spaces is huge in India. We expect the growth of residential rooftop solar installations to accelerate in the near term across India because of the strong policy push and resurgent market demand,” says the report’s co-author Vibhuti Garg, Director – South Asia, IEEFA.

“The Indian residential rooftop solar segment is at the cusp of a robust growth phase. From the 2 gigawatts (GW) cumulative installed capacity (as of fiscal year (FY) 2022), the residential market will likely reach 3.2GW by FY2023,” added Garg.

Regarding demand-side drivers, the report highlights that there has been a key change brought about in consumer behaviour and demands after Covid-19.

“The lack of consumer awareness had been one of the major impediments to adoption, especially in the pre-Covid-19 era. However, post-Covid-19, there has been a strong surge in demand, backed by enhanced consciousness about cost savings, the environment, etc,” says co-author Jyoti Gulia, Founder, JMK Research.

“Interestingly, while the pace of the solarisation of India’s residential segment has been underwhelming, the country has been the world's least expensive residential solar power market for about a decade,” added Gulia.

In 2020, the average cost of a residential rooftop solar system in India was US$658 per kilowatt (kW), declining by 73 per cent from the 2013 level. In comparison, in 2020, the residential rooftop solar cost in leading residential markets, such as Japan, the United Kingdom, Switzerland and the US, was 3.3 to 6.4 times higher than that of India.

The report adds that the central government’s recent push by launching a single national digital portal to simplify the process of residential rooftop solar installations and formalising a direct benefit transfer mechanism will boost capacity addition.