Wednesday, May 29, 2013: Solar projects in India continue to face uncertainty at the face of policy changes and related factors. According to Mercom Capital Group, with policies and rules being changed every month, the projects are running at a slow pace, quite slower that what one would have expected in the start.
Initially, the plans were meant for 1,761 MW installation bases, but so far we have just managed 557 MW of installations being worked on with several other projects delayed and postponed. Mercom Group, llc, is a clean energy consultant for the ongoing projects.
Considering the topography and demands in the subcontinent, the growth rate for the projects was estimated to be much higher from other countries of the world, but so far, we have only seen disappointing results. Mercom also added that the latest policy regarding the environment seems more of an experiment as opposed to a serious step being planned for. “Earlier we have faced delays due to domestic content requirement policies and this is another split we are destined for.”
Many of the policy changes that the center has made are in strict contradiction to the initial mission the projects were aimed at. The current policies are totally disconnected to the cost effective procurement guidelines set initially. Accordingly, a reverse bidding process was chosen, but efforts were made that the lowest bidders weren’t able to access low priced equipment.
In another step taken by the Ministry of New and Renewable Energy, bidding will now be open for Viability Gap Funding instead of low cost procurement. Only time will tell if this will help accelerate growth. States including Odisha, Punjab, Chattisgarh, Tamil Nadu, Maharashtra, Rajasthan and Gujarat are proposing their own schemes to harness solar energy. Among these, Gujarat is the leading promoter with an installation base that already amounts to 857 MW.
