Indian Solar Energy Feed in Tariff Federal Discrimination leads to State Pushback

The Indian Solar Energy Policy JNNSM has been beset with more than its fair share of problems even before completing its first phase.Despite ambitious plans to set up 20 GW of Solar Energy Capacity by 2022,the Policy Support and Subsidy has come under fire from all directions.The First Phase of JNNSM has auctioned 150 MW of Solar PV Capacity to 30 Developers in blocs of 5 MW each.This led to irrational bidding by mostly unknown and bit players which has led many to question to the ultimate viability of these projects.Note the Solar Thermal Bidding has been equally as disastrous with bidding leading to very low tariffs for the winning developers.

The State nodal agencies have also started objecting to the tariff policy as 80 MW of Solar Projects were awarded the base FIT of Rs 17.91 as they were transferred to the Indian Federal Subsidy from their initial PPAs with individual states.Note these solar project developers who have managed to get transferred will get tariffs which are almost 60% higher than the lowest bidder for the 5 MW Solar Project at Rs 10.95.This will also mean a much large taxpayer outgo to the 16 Project Winners for the 80 MW than for the 150 MW projects.Note the earlier auction of 100-2000 kw also took place at higher FIT of Rs 17.91 and those winners are already flipping their projects selling their licenses for massive profits.Note their is not much difference in costs for a 2 MW project as compared to a 5 MW project so even this part of the Subsidy raises questions.Till now the JNNSM has not proved to be much of a success failing to create a conductive environment for the growth of solar energy in India.However the potential of future growth in India remains immense despite this.

Tariff disparity to hit solar mission

Disparity in tariff offers to developers of solar power projects may derail the government’s ambitious Jawaharlal Nehru Solar Power Mission-2022, with many state nodal agencies, responsible in facilitating green energy generation, objecting to more financial outgo towards 80 mw of solar photo voltaic (PV) generation.

The government awarded 150 mw of solar PV projects to 30 developers (5mw each) to kick off the solar mission, which is envisaged to generate 20,000 mw of solar PV power by 2022. But the generation tariff offered to the 30 developers range between Rs 10.95 and Rs 12.00 per unit against an earlier offer of Rs 17.91 per unit to 16 developers to generate 80 mw of solar PV power.