Expect A Slowdown in Solar Projects Once Again

As the onslaught of the COVID-19 pandemic continues, the solar developers seek an extension of a period of few months on their ongoing projects.  The solar industry developers’ group Solar Power Developers Association (SPDA) has requested an additional three-month extension in the project commissioning date to the MNRE. Solar projects are now facing implementation issues as the number of cases rises nationwide. Some projects could also see a cancellation if this extension is not granted. Delayed project completion will also lead to higher costs for the developer.

Some states like Rajasthan, Maharashtra, and Madhya Pradesh are already seeing work being halted at the solar projects. Developers have started to face challenges that the solar power industry was facing in the last year. As cases have increased, there is a shortage of workers and also supply chain disruption. MNRE also received requests earlier this year (around Feb. 2021) for another five-month extension for renewable projects commissioning on top of one granted in 2020. MNRE had rejected the same and said that any further extensions may only be granted on a case-to-case basis.

To mitigate the issue, the Ministry of New and Renewable Energy had granted a blanket extension of five months to all ongoing projects in the last year (from 25 March to 24 August 2020). Under this order, all renewable energy projects were supposed to treat lockdown due to COVID-19 as a force majeure event. All renewable energy projects under implementation as of the date of lockdown, 25 March 2020, were granted the five-month time extension. The SPDA is looking for similar protection in the current year as well.

The Indian solar industry was positive about this year, as the number of cases had subsided at the beginning of this year. They had expected an increase in activity as the majority of the work was halted last year. However, this sudden resurgence has raised alarms in all aspects of life. The situation is grim indeed. It remains to be seen if the developers are granted the much-needed relief again.

Also, read Tata Solar Doubles Solar Manufacturing Capacity After PLI Scheme