In a major development, the Solar Energy Corporation of India (SECI) has reduced its solar manufacturing tender size from 5 GW to 3 GW, and curtailed the minimum bid capacity from 1 GW to 600 MW. The size of Power Purchase Agreement (PPA), however, remains unchanged at 10 GW.
To ensure their continued viability, nearly 8 GW of solar PV projects have been granted an extension by the Ministry of New and renewable Energy (MNRE).
In a major development, the Ministry of New & Renewable Energy (MNRE) has directed the Solar Energy Corporation of India (SECI) to fix the upper permissible solar tariff at Rs. 2.50 (US$0.036)/kWh and Rs. 2.68 ($0.038)/kWh for developers using domestic solar cells and modules (without safeguard duties), and imported products (with safeguard duties), respectively.
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.
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.
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.
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