The Indian solar market added 1,869 MW capacity in April-June quarter taking the installations to 4,765 MW during H1 of 2017, a recent survey said.
According to a study conducted by Mercom India Research, the total capacity added in the first half (January-June 2017) of this year has surpassed the total capacity addition in 2016 which stood at 4,313 MW and is likely to reach 10.5 GW by the end-2017.
Large scale solar installations totalled 1,639 MW in Q2 2017 and made up 4,290 MW while rooftop installations accounted for 230 MW taking the total to 475 MW.
"The Indian solar market had its best first half and is on pace to have its best year. However, uncertainty around GST rates, utilities renegotiating to get better rates, and the recently initiated anti-dumping case has stalled momentum in the sector and could have a significant negative effect on installations in 2018," Mercom Capital Group CEO and Co-founder Raj Prabhu said.
He further said there is still a lot of confusion and ambiguity surrounding the Goods and Services Tax (GST), which is also a concern for the sector.
"Initially, a rate of five per cent was announced for all solar components, which was then clarified to five per cent only for solar modules and 18 per cent or more for other components.
"The most recent update is that the Ministry of New and Renewable Energy (MNRE) is pushing for a five per cent rate, though nothing is official yet," Prabhu added.
The second quarter also saw the lowest ever tariff of Rs 2.44 per unit in the recently conducted 500 MW Bhadla Phase-III Solar Park auction.
Most utilities now want a similarly low tariff, which has led to delays in PPA signings, tenders, and auctions, the report said.
"Most projects under construction will not be affected, but new tender and auction activity has stalled and most developers are taking a pessimistic view of the recent developments," Mercom Communications India Managing Director Priya Sanjay said.
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