Loading...

Indian solar industry gets busy as the financial year draws to a close


21 March 2016 | BRIDGE TO INDIA

Indian solar industry gets busy as the financial year draws to a close

As we come to the end of the financial year, a rush to meet allocation and announcement targets has made the Indian solar market fairly frantic. Just last week, bid results were announced for a cumulative capacity of 1,425 MW including a 1,200 MW state allocation in Jharkhand, a 125 MW allocation in Uttar Pradesh by Solar Energy Corporation of India (SECI) and a 100 MW allocation in Rajasthan by National Thermal Power Corporation (NTPC). Apart from that, new tenders were announced for a 750 MW state allocation in Madhya Pradesh and a 100 MW SECI allocation in Chhattisgarh. India’s overall solar project pipeline now stands at a staggering 23 GW.

Key highlights:

  • Bid results in Jharkhand show that there is enough appetite in the market to sustain aggressive bidding for every available opportunity
  • Bidder interest in NSM tenders in Uttar Pradesh and Rajasthan was muted for specific reasons but the end results are still very aggressive
  • BRIDGE TO INDIA expects capacity addition of 4.8 GW in 2016 and over 9 GW in 2017 utility scale projects, making India one of the top global markets

Jharkhand’s 1,200 MW tender was split in two parts – 200 MW was reserved for smaller project sizes between 1-25 MW and 1,000 MW was reserved for larger projects sizes between 26-500 MW. For the smaller projects, winning bids were received in a wide range of INR 5.29 – 7.79/kWh providing attractive returns to developers. For the larger projects, however, winning bids were much more aggressive at INR 5.08 – 5.48/kWh considering that this was an exceptionally large tender for a small state meeting over 90% of its peak consumption and over 20% of its overall power requirement. Further, Jharkhand State Electricity Board has a poor credit risk profile and its credit rating of C+ is ahead of only four other distribution utilities out of a total of 39 rated in the country. The rationale for the state to bring out such a large tender or for the developers to bid so aggressively is unclear to us. But it is clear that there remains strong interest in the market for bidding for every available opportunity.

For the 100 MW NTPC tender in Rajasthan, the three winning bids were in a very close range of INR 5.06 –  5.07/kWh. Given that these projects are under the DCR category, these bids are extremely aggressive, adjusted for higher module cost and risk associated with their availability.

The SECI tender for 125 MW in Uttar Pradesh saw a limited participation from just three companies. IndiaBulls and SolaireDirect won 50 MW and 75 MW at a tariff of INR 4.43 with Viability Gap Funding (VGF) of INR 7.5 million and INR 7.43 million respectively. The limited participation in Uttar Pradesh was primarily due to high solar park costs and concerns about implementation of solar parks (refer).

India’s current solar PV pipeline of 23 GW is divided into 15 GW of tenders where bids have been submitted already and 8 GW of tenders pending bid submission. The Ministry of New and Renewable Energy (MNRE) believes that India would add 12 GW of solar capacity in 2016-17 (refer). However, past experience has shown that there are significant timeline slippages in project implementation particularly in state tenders. BRIDGE TO INDIA’s analysis shows that in the past nearly 40% of projects in state tenders are either significantly delayed or scrapped altogether. Reasons include delays in signing of PPAs, failure in arranging land, transmission and/or financing for projects (refer).  BRIDGE TO INDIA estimates capacity addition of 4.8 GW in 2016 and over 9 GW in 2017 excluding additions in the rooftop solar and open access solar markets. That would make India the fourth largest solar market in the world after China, US and Japan in 2016, with a chance of India overtaking Japan in 2017.


Recent reports

India Solar Map | December 2023

India Solar Map | December 2023

India Solar Map 2023 is an info-graphic report covering growth of utility scale solar sector – national and state-wise commissioned and pipeline capacity, leading market players and portfolio details of top 16 project developers. Capacity addition in 2023 fell 51% YOY to 5,924 MW taking total utility scale solar capacity to 59,840 MW. Total project pipeline stands at a record 74,161 MW.

India Corporate Renewable Brief | Q4 2023

India Corporate Renewable Brief | Q4 2023

This report provides an update on key trends and developments in the corporate renewable market including capacity addition, key players, policy & regulatory issuance, financing, PPA tariffs and other market trends.

India PV Module Intelligence Brief | Q4 2023

India PV Module Intelligence Brief | Q4 2023

This report captures quarterly trends in module demand and supply, import and domestic production volumes, supplier market shares, break-up by technology and rating, global market scenario, pricing trends across the value chain, key policy developments and market outlook.

India Solar Compass | Q4 2023

India Solar Compass | Q4 2023

This report provides a detailed update of all key sector developments and trends in the quarter – capacity addition, leading players, tenders and policy announcements, equipment prices, financial deals and other market developments. It also provides market outlook for the next two quarters.

Inter-state OA — opportunities and challenges

Inter-state OA — opportunities and challenges

Inter-state transmission system (ISTS) open access (OA) renewable market is growing strongly on the back of multiple drivers including a waiver from ISTS charges together with decarbonisation pressure on corporates and streamlined transmission connectivity approval process. However, the ISTS route savings are viable only for projects commissioned by June 2026 (at least 75% ISTS charge waiver).

India Corporate Renewable Brief | Q3 2023

India Corporate Renewable Brief | Q3 2023

This report provides an update on key trends and developments in the corporate renewable market including capacity addition, key players, policy & regulatory issuance, financing, PPA tariffs and other market trends.

To top