New Delhi– The solar power auction in November saw a 98 per cent drop with only 5 MW auctioned against 270 MW in October, a report said on Wednesday.
It also pointed out that total solar project tendered also saw a steep decline with 300 MW offered in November against 400 MW in October.
“The solar capacity tendered across the country during the month fell by 25 per cent to 300 MW compared to the October 2017 total and the amount of solar auctioned dropped by 98 per cent to just 5 MW,” said the report by clean energy consulting firm Mercom Capital Group.
According to experts, one of the reasons for this steep fall is rise in Goods and Services Tax (GST) slab on solar equipment and the anti-dumping case, where Indian manufacturers demand drop in duty to compete against the very-low priced equipment offered by Chinese exporters.
Also, the All India Solar Industries Association on Wednesday said that GST has led to 10-12 per cent rise in overall cost of solar projects. In August, Union Power Minister Piyush Goyal said clarified that 5 per cent GST will be applicable on solar equipment and the government cannot do anything about it.
Mercom Capital Group CEO Raj Prabhu said: “Hopefully, tender and auction activity has bottomed out.
“The GST issue is almost behind us and the government is asking Discoms to refrain from PPA renegotiations, even though the anti-dumping case is still looming.”
As per the report, the largest tender seen in November was by Karnataka Renewable Energy Development Ltd (KREDL), the renewable energy implementing agency in the southern state, which re-tendered 200 MW of solar power to be developed at the state’s Pavagada Solar Park.
The only solar auction in November was by Solar Energy Corporation of India (SECI) that auctioned a 5 MW grid-connected solar PV project under the National Solar Mission Defence viability gap funding programme for an ordnance factory in Uttar Pradesh’s Kanpur.
Under the auction, Giriraj Renewables Pvt Ltd emerged as the successful bidder by quoting a tariff of Rs 4.18 per kWh.
According to Mercom Group, the cumulative solar installations in India surpassed 17 GW as of September 2017, with over 7 GW installed in the first nine months of the year.
“Following the recent lull in tender activity, Ministry of New and Renewable Energy (MNRE) revealed that it is preparing to announce a spate of tenders for solar projects over the course of four months starting in December 2017,” the report said, adding these aim to help the government reach its goal of installing 100 GW of solar capacity by 2022.
The MNRE says it will work alongside states to announce tenders needed to reach 20 GW of ground-mounted capacity in solar parks in 2017-18. Of the 20 GW, 3.6 GW have already been tendered while another 3 GW were set to be tendered in December, followed by 3 GW in January 2018, 5 GW in February and 6 GW in March. Another 30 GW is expected to be tendered in 2018-19 with 30 GW to follow in 2019-20. (IANS)