The customs duty, which add up to 10% of Solar Panels cost, would NOT be scrapped altogether as confirmed after a meeting between MNRE and the finance secretary (refer). This would mean that the presumptions, about decreasing price of solar, of many developers may not come true, based on which they may have quoted to their clients or PPAs signed.
However, those developers who have won auctions expecting the customs duty would be ‘protected’. That does not necessarily mean that the exemptions would be provided to them. It may be given in another form too which has not been specified. Of course, this would be for projects that have already been won and not the ones that follow.
What we can expect is the tariff of INR 2.44 to be a minimum point for solar tariffs, which would rise going further (at least for a while).
On the positive side, an increase in solar panel prices imported from outside India would make the Indian panels at par with foreign ones possibly pushing sales up for them considering a shorter fulfillment time.
Further, with Indian panel prices at par with foreign ones (post imposition), we may also see Make in India finally pick up with a possible change in scale of operations of Indian Module Manufacturers since they would be assured returns (demand based) as long as these duties are in place. Looking at it from a pure economic standpoint, this would be a definite boost to manufacturing of Solar Panels in India with expectations of achieving economies of scale in the sector.
With Solar Power projects being largely backed with Non-Banking Financial Companies (NBFCs) and Private Equity Firms (PEs), Solar PV Projects were never considered something anyone would easily invest in. While the project return expectations were high, the risks were considered equally high (refer, despite dropping costs, it’s still around 14%).
‘Solar Project Investment’ had a futuristic aura linked to it making it ‘non-mainstream’ financial instrument. Even though banks have been directed in the budgets of 2015, 2016 and 2017 to start disbursing loans for solar, little action has been seen on ground. (more…)
Mumbai, December 5–7, 2017
MUMBAI/PFORZHEIM/FREIBURG, Intersolar India, a unique platform for the solar industry has been proudly associated with the Indian solar industry since 2009. The conference has been successfully providing a platform for all the stakeholders to meet, exchange information and ideas, discuss challenges and solutions and promoting the interest of the solar industry. In the Intersolar exhibition, domestic and global companies would exhibit their wares and solutions and reach out to new customers and to further bond with their existing customers.
The three days of exciting proceedings open on December 5, 2017 at the Bombay Exhibition Centre (BEC). Over 100 industry experts from Indian and global solar and energy storage industries and policymakers will share their insights. Over 500 delegates are expected to participate in the conference. This year’s exhibition is certified by the US Department of Commerce and has US and German pavilions besides an exclusive pavilion for Electrical Energy Storage. Approx. 260 domestic and foreign exhibitors are showcasing their latest products and solutions and over 12,000 national and international visitors are expected to visit and benefit from the event.
In an amendment of the Gujarat Solar Net Metering Policy (refer), there seems to be some good news. One of the reasons why Rooftop Solar Projects had slowed in the recent past in Gujarat can be attributed to the limit put by GERC earlier on ‘what capacity’ solar plant can be installed which was only 50% of the sanctioned load (refer).
However, in the amendment, the limit has been altogether removed. But, this has been done only for the Residential Customer. The capacity limit of 50% remains for all other segments for the ‘Initial 2 years’. This would probably mean, the capacity maybe increased after 2 years or operation. This regulation is unique to Gujarat and may have a lesser thought of implication which is that in two years, AD maybe completely phased out hence, allowing the government not to lose out on tax collection by too much. This is considering that most Commercial Establishments use Installation of Solar Power also as a tax saving tool.
Looking at some facts
As per recent developments, the first ever battery backed Solar Project has been awarded to Mahindra Susten (refer), which emerged as the lowest bidder! This comes as a surprise with Mahindra not winning the last few bids which discovered progressively lower tariffs (INR 3.15, INR 2.44).
Neyveli Lignite Corporation (NLC) invited bids for setting up the 20 MW project in Andaman and has recently awarded it Mahindra after an extending the bid owing to a poor response earlier (refer). The project will have 28 MWh of battery which equates to 28 MW consumed continuously for one hour. This is a 5 times increase from the current capacity of solar PV around 5 MW in Andaman (Page 1, refer).
The Uttar Pradesh Solar Policy (Draft) highlights a few important figures on capacity of Solar Energy in India. It states that the potential stands at a whopping 23.8 GW in the state out of which the MNRE target is 10.7 GW (4.3 GW in Rooftop) by 2022. The current installed capacity however, stands at 0.269 GW (as of January 2017) which is only 2.5% of the target (refer).
Among the types of Solar Projects for which the Solar Policy is applicable for (see below), only Rooftop Projects have a definite target to achieve:
Our last few blogs have been about analyzing some of the announcements and clarifications by Ministry of New and Renewable Energy and yet again, the organization has some more news for us. The gazette was signed on 30th August, 2017 itself, however, was published on the website only recently.
This gazette (refer) focuses on standardizing quality of material used and hence the Solar PV projects executed. It aims to address the larger concern in the market of “who takes responsibility if my solar power system doesn’t work”. MNRE takes that responsibility.
MNRE is actively putting out clarifications that the industry has been seeking. The last one was on Concessional Custom Duty Exemption (refer) and now, there is one on who’s eligible for subsidy (refer). We hope that this clarifies the mess about who really is eligible for subsidy. A brief of the clarification is as follows:
- All rooftop solar power plants, whether net-metered/ gross-metered or not, are all eligible for Central Financial Assistance or Subsidy of 30% provided by Ministry of New and Renewable Energy. Of course, this has a restriction that it is only for those of the Institutional, Domestic or Social Sector (refer)
Yes, the industry has progressed. Solar Energy is booming, it’s the future! We just hit a record low tariff of INR 2.44 for Solar Energy- proving that grid electricity won’t be here for long. Yet, there is something extremely important that has lacked in the industry: Efficiency. It’s ironical that we speak of ‘energy efficiency’ when the industry is not able to deliver efficiency in work completion itself.
Sometimes, it’s about approvals and sometimes about lagging timelines for equipment delivery or high prices offered by equipment suppliers. Of course, we all get bothered by it, yet, we have not been able to address this issue since our hands had been tied. After a lot of thinking and brain-storming, we came up with an idea which we thought may address part of the problem. (more…)