Bengaluru: India’s solar energy success story is showing signs of slowing down, with capacity addition this fiscal falling short of target at a three-year low.
Developers added 6,500 mw of solar capacity in the financial year 2018-19, as against a target of 10,000 mw for the year. Capacity addition in 2017-18 was higher at 10,400 mw, while in the previous year, it was 9,100 mw, according to a senior official at the Ministry of New and Renewable Energy.
Industry experts and developers said the imposition of safeguard duty and the cancellation of solar auctions were the main reasons for the relatively low addition.
India imposed a 25% safeguard duty on the import of solar panels and modules, mostly from China and Malaysia, from end July for a year, followed by 20% for the next six months and 15% for another half-year. This increased the cost of installing solar projects and consequently tariffs, without so far leading to any appreciable growth in the domestic solar manufacturing industry.
“Three things have caused this. Firstly, there was a period in the first half of 2018 where tenders were not happening,” a developer said on condition of anonymity.
“Secondly, the imposition of safeguard duty. Developers have deliberately been delaying commissioning of projects until the duty peters out,” he said.
Thirdly, both central and state agencies have been cancelling auctions whenever the winning tariffs seemed too high for them.
The latest instance was Gujarat scrapping a 700 mw auction held in December. According to solar consultancy Bridge of India, 5,300 mw of valid winning bids were cancelled in 2018.
“It is because of these three problems that the installation has been so low,” the developer said.
The ministry official said 35,000 MW was tendered during the year.
“But being tendered and actually getting projects on the ground are two different things,” the developer said. The government has set a target of installing 100 gw of solar capacity in the country by 2022.
India’s installed solar capacity stood at 26,025.97 mw at the end of January, according to data on the Central Electricity Authority’s website.
Source: economictimes.indiatimes.com