Markets

The award of the nation’s first solar project quality certificate may signal a renewed determination by the federal authorities to crack down on low-quality panels – with Far Eastern imports firmly in their sights.

A time-bound process would eliminate financial uncertainties for stakeholders – be it developers, lenders or the DISCOMs. It is a particularly big relief to solar PV power developers seeking pass-through for the impact of goods and services tax (GST) on project costs.

With a rapid reduction in costs, solar plus storage can be an effective alternative for customers buying peak power from the grid. At the same time, utilities can avoid investments in peak capacity or eliminate load shedding by utilizing these resources.

The government department has allocated various months for enabling organisations to hold their tendering and bidding processes, but critics have pointed out states are free to formulate their own plans.

Banks categorize renewable energy projects as risky and believe they offer lower rates of return than fossil fuel schemes, making them reluctant lenders.

Bidders can apply for the whole capacity or 50 MW sections, and the maximum payable tariff for the energy generated cannot exceed Rs2.93/kWh. The electricity generated will be sold to the state power company.

States such as Karnataka and Madhya Pradesh, which previously took the lead in terms of installed solar capacity, are likely to take a back seat on this issue, due to the rollback of incentives.

The currency is reaching new lows. As concerns about Turkey’s economic woes persisted last week, the rupee hit a record low of 70.32 to the dollar, having breached the historic 70 mark earlier in the week.

A combination of national, state and public body commitments could see the amount of PV added nationally treble on the last four-year period. But even with a new 7-8 GW added, rooftop solar will still be bringing up the rear.

Even though postponing the duty on solar cell imports from China and Malaysia is not a long-term resolution, it will offer relief to developers with ongoing PV projects, especially for those with shipments in transit or which arrived after 30 July.