Weekly Update: SECI launches the second round of competitive bidding for rooftop solar PV projects

Weekly Update: SECI launches the second round of competitive bidding for rooftop solar PV projects

The Solar Energy Corporation of India (SECI) has announced the second round of biddings for the implementation of large scale, grid connected rooftop PV systems ranging from 100 kWp to 500 kWp for a total allocation of 11.1 MW.

  • A developer can apply for multiple projects for a minimum allocation of 250kWp and a maximum of 2 MWp
  • No Feed-in-Tariff is being offered. Instead, the bidder will quote a cost in INR/Wp terms based on which SECI will provide a capital subsidy of 30%
  • Sale of power and the negotiation of the tariff is the developer’s responsibility

The projects will be spread across the cities of Bhubaneswar/Cuttack (1 MW) in Odisha, Gurgaon (1.5 MW) in Haryana, Hyderabad (2 MW) in Andhra Pradesh, Jaipur (3.1 MW) in Rajasthan, Noida/Greater Noida (1.5 MW) in Uttar Pradesh and Raipur/Naya Raipur (2 MW) in Chhattisgarh. A developer can apply for multiple projects for a minimum allocation of 250kWp and a maximum of 2 MWp. The SECI has released the Request for Selection (RfS) document on 1st May 2013 India (refer). The pre-bid meeting is scheduled to be held on May 8th 2013 in Delhi and the last date for the submission of bids is May 30th 2013.

The rooftop PV allocations are different from most policy-based allocations so far in that there is no Feed-in-Tariff (FiT) being offered. Instead, SECI will provide a capital subsidy of 30%. This is similar to the off-grid capital subsidy scheme of the Ministry of New and Renewable Energy (MNRE). Under this mechanism, the scope of work for the bidder includes the identification and leasing of the buildings suitable for the rooftop plants. The bidders also need to obtain No Objection Certificates (NOC) from the relevant distribution company (DISCOM) for connecting the projects to the grid. In addition, bidders are responsible for the complete design, engineering, manufacturing, supply, storage, civil work, erection, testing and commissioning of the grid connected rooftop solar PV project, including operation and maintenance (O&M) for a period of two years after commissioning of the plant.

Under the new mechanism, the bidder quotes a consolidated cost in INR/Wp terms for providing a turnkey solution. Based on this bid price, SECI will provide a capital subsidy of 30%. However, the disbursement of the subsidy is linked to the performance of the plants: 20% will be disbursed at the time of commissioning after the project can prove a performance ratio of a minimum of 75%. A further 5% will be disbursed at the end of the first year, and another 5% at the end of the second year of generation of the plant, if the project can prove a minimum Capacity Utilization Factor (CUF) of 15% for the two years.

The sale of power and the negotiation of the tariff is the developer’s responsibility (refer to the clarifications provided by the SECI in the first phase of biddings). The generated power is expected to be consumed by the rooftop owner first, after which any excess power can be exported to grid.

The new allocation process improves on the existing process for disbursing the MNRE subsidy as (a) it is competitive, which means that the cost to the government exchequer will be minimized; and (b) the disbursement of the subsidy is tied to the performance of the plant, which will ensure that the subsidy is released only to well executed projects. If SECI can allocate such subsidy-based projects on a monthly basis and not limit the allocations to some particular cities, the process can become an effective and transparent replacement of the existing MNRE capital subsidy.

This post is an excerpt from this week’s INDIA SOLAR WEEKLY MARKET UPDATE. Sign up to our mailing list to receive these updates every week.

You can view our archive of INDIA SOLAR WEEKLY MARKET UPDATES here.

What are your thoughts? Leave a comment below.

Leave a Reply

Your email address will not be published. Required fields are marked *