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