In the last two quarters of every financial year (October – March) for the last couple of years, the solar policy space in India has become alive. This year is no exception and in the last couple of weeks we have seen announcements on phase two of the National Solar Mission (NSM), Kerala’s recently finalized solar policy and new project allocations in Haryana.

• The pre-bid meeting focused on the relevance of the location of a project, the working of the CUF limits and the impact of anti-dumping duties on the allocations
• Under Kerala’s draft solar policy, the state has a target of an installed capacity of 500 MW by 2017 and 1,500 MW by 2030
• Haryana to soon begin allocating 10 projects of 5 MW each using standard tariff based reverse bidding process

This happens every year because state and central governments need to publish policies now to meet next year’s capacity addition targets. However, in the past, the implementation of at least the state policies dragged on and most of the actual capacity addition has spilt over to the subsequent year. Last year, around this time, solar policies in Tamil Nadu, Andhra Pradesh, Uttar Pradesh and Punjab were doing the rounds. As per the original plan, a majority of the capacity under these policies should have been commissioned by March 2014. However, timely meeting of these targets seems nowhere in sight.

Even though the announcement of phase two of the NSM has been delayed, this being a central government policy, the allocation process will likely be implemented on schedule. The pre-bid meeting was held on 19th November 2013. Based on BRIDGE TO INDIA’s perception, the government officials were helpful and most developers satisfied with the process. The Solar Energy Corporation of India (SECI) is expected to release a clarification document soon to address specific questions. The key aspects discussed in the meeting were related to the relevance of the location of a project, the working of the Capacity Utilization Factor (CUF) limits set under the bid document and the possible impact of anti-dumping duties on the allocations. Read our blog for further analysis on these topics and our overall take on the pre-bid meeting.

Kerala’s draft solar policy has also received cabinet approval and has now been finalized (the draft policy document can be downloaded from here, the final document should be uploaded soon). Under the draft policy, Kerala has set itself a target of an installed capacity of 500 MW by 2017 and 1,500 MW by 2030. Like Tamil Nadu, Kerala has also tried to pass on the financial burden of Renewable Purchase Obligations (RPOs) from the state-owned distribution company (DISCOM) to large power consumers. Solar Procurement Obligations (SPOs) will be mandated for commercial consumers with a connected load of more than 20 kVA and industrial consumers with more than 50 kVA on the low tension (LT) transmission network (up to 415 V). Also, SPOs will be applicable to all consumers connected to the high tension (HT) transmission network (up to 11 kV) and Extra High Tension (EHT) transmission network (up to 66 kV). Further analysis of the Kerala solar policy can be accessed here. Earlier, the state had already initiated a 10,000 rooftop solar power programme (refer). The implementation of this programme seems to be on track as most of the installations have already taken place. Reportedly, there has been some delay in the release of subsidies to the empaneled installers.

The state government of Haryana is also expected to begin the process of allocating 10 projects of 5 MW each based on the state’s draft solar policy (the draft policy document can be accessed here). These projects are to be allocated using the standard tariff based reverse bidding process. The power from these projects would be bought by the state distribution companies. Apart from these utility scale projects, the policy also talks about canal solar projects and promotion of rooftop solar installations for commercial buildings. However, no update is available on the implementation of these aspects of the policy.

As things stand, execution of projects under the NSM, Andhra Pradesh, Tamil Nadu, Punjab, Uttar Pradesh and now perhaps even Haryana and Kerala can be expected around the second half of 2014. Theoretically, this may add up to over 1,800 MW that would need to be executed in a limited span of time. However, if the past experience is any indicator, many of these policies and projects are expected to hit further roadblocks.

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.

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