The recent National Solar Mission (NSM) tenders have been delayed multiple times before and are again delayed now. This pattern of delays is not new.

  • Only one of the 30 odd bids in India has gone through without significant extensions or delays
  • Main culprits are process delays by implementation agencies and requests for time extension from developers – these delays affect sector development as many players, particularly the new entrants are not conditioned to respond to the way business is carried out in India
  • MNRE should play a key role in streamlining the somewhat disorganized tender process so as to improve the ‘ease of doing business’


On Sunday, 5th June 2015, one of India’s leading economic journalists, Swaminathan Aiyar, in his weekly column “Swaminomics”, wrote that India should wait for five years before trying to implement big plans for solar (refer). He argues that solar is still a comparatively expensive energy generation technology and that because India is an evening peak country, increasing the share of solar would be a “double whammy”, by driving up indirect costs for thermal, peak power generating sources. As a result, he concludes, India should go all out on solar only after it is fully established that the cost breakthrough has been achieved and the technology is more mature. While there are interesting insights in the article, we disagree with his conclusions. Here is why.

  • Solar costs are not as high as Swami claims. In fact, upcoming NSM bids will show that it’s neck to neck with        new thermal projects.
  • India is an evening peak country right now but as the economy develops the peak will move into the daytime          (cooling).
  • Global investors already see the social and economic appeal of solar and are moving out from coal to the                sector.


The process to substantially alter India’s future energy mix seems to have begun. This is very good news for renewables. Prime Minister Narendra Modi re-iterated India’s current target of installing 175 GW of renewables by 2022 at the United Nations General Assembly last week. This would then be equivalent to almost 20% of India’s power generation. Over and above this, and in the context of India’s Intended Nationally Determined Contributions (INDCs) for the climate negotiations in Paris, the target could be raised to a stunning 250 GW of solar and 100 GW of wind power capacity by 2030, which when added to other renewables would be equivalent to nearly 40% of power from renewables by 2030 (refer).

  • Successfully implementing such targets would mean decades of growth for the solar sector
  • The underlying premise of these ambitions is the belief that storage and smart grid technology will become economical and ready for implementation over the next five years
  • India needs to start thinking about storage technology for large scale integration of renewables and possibly even using storage to leapfrog grid investments for rural electrification


On paper, the solar parks policy is excellent. It tackles the two major issues of land acquisition and evacuation, reducing developer risk. In theory, this should bring down the cost of solar power. However, after seeing the costs released for the recently announced solar parks in Andhra Pradesh, Rajasthan, Gujarat and Karnataka, most developers are of the opinion that they could have quoted lower tariffs had they been allowed to bid for projects outside the park. Now, this is despite the fact the states are receiving a substantial central grant of 50% (or up to INR 2 million per MW) for developing this park infrastructure.

  • High charges for solar parks can make solar power more expensive by between INR 0.16/kWh – INR 0.36/kWh
  • Cost of leasing land inside the park is turning out to be more expensive that buying the land outright and creating own evacuation infrastructure
  • The policy itself is useful but the key reason behind this failure is inefficiencies in implementation and the Solar Park Implementation Agencies (SPIA) structure

The concept is that a Solar Park Implementation Agency (SPIA) in each state is responsible for land acquisition and infrastructure development, including evacuation. Developers are then expected to invest into and develop individual solar projects on top of the solar parks infrastructure. FULL STORY

Bids were submitted last week for 10×50 MW of solar PV projects under the new phase of National Solar Mission (NSM) in Andhra Pradesh. This is the first round of NSM bids since the new government took office in May 2014. This is also the first time that bids have been called for projects to be set up in solar parks being developed under the new Solar Parks Policy. A total of 30 developers have submitted valid bids totaling 5.5 GW.

  • Six developers including SunEdison, Adani, Rattan India, Reliance, SoftBank and Energon have bid for the entire 500 MW capacity;
  • Prominent new entrants include SoftBank, Trina Solar, Enel, Energon, Solar Arise, Suzlon and Greenko;
  • Industry murmurs suggest very aggressive tariffs that can even fall below INR 5/kWh but we remain skeptical in view of high solar park infrastructure costs;