Solar Energy in India has the potential to be the biggest Energy Opportunity in the World because of a multitude of favorable factors.The Government of India has also signaled strong support for Solar Energy with 20 GW Target by 2020 which equals that of China .The JNNSM which was unveiled with much fanfare has promised much but teething problems threaten to crash the Solar Party in India.While some of these problems were discussed earlier like a) Debt Financing of Solar Projects b) Irrational Bidding c)Small Plant Sizes of 5 MW d) Unhealthy Competition ,other problems have cropped up.Note India was trying to avoid the fate of the Czech and Spanish example of renewable energy subsidy boom and subsequent bust by auctioning the projects to lower bidders.However this has resulted in a new set of problems seen with this type of bidding which has been seen in China.
The biggest problem is that the winners of the Solar PV Projects are mostly unknown small firms who have bid so low that make the returns negative for investors according to the renewable energy ministry officials (MNRE).Bidding has gone as low as 23c/Kwh which is crazily low considering the debt costs in India are as high as 13% annually.Compare that to China where debt is priced as low as 3-4% and the winners are huge utilities.With even India’s Tata Power saying that the projects are not bankable as their is confusion how the electricity tariffs will go to developers,its difficult how these unknown firms could manage the financing .While the companies will lose their bid deposits if they don’t finish the projects,Indian Solar Energy will be the biggest loser as the failure of the Phase 1 of JNNSM of 1000 MW by 2013 will lead to even further delays.Already JNNSM has been criticized by a parliamentary panel for the tardy progress.Note some states have taken the lead in pushing solar energy on their own,namely Gujarat which aims to put up more than 500 MW in the next year or two.
Solar short list raises spectre of fresh scam – FC
Google+These companies have offered large discounts and rank ahead of corporate majors like Indian Oil Corporation, Punj Lloyd and Mahindra Solar. Their selection and very low quoted tariff rates have raised the spectre of another scam in the making.The companies have been short-listed on the basis of tariff discounts they proposed to offer. They have quoted extremely low tariffs, which according to industry experts are unrealistic.
An official of the new and renewable energy ministry told this newspaper that half of the 30 lowest bidders on the short list are unknown companies. They have been selected for setting up 150-mw solar photovoltaic projects in first phase. One firm was allowed to submit only one bid to set up a 5-mw plant.The official said government was extra cautious to prevent fraud as in the telecom case. “We are a little surprised to find eight bids to set up 5-mw plants in Nagaur district of Rajasthan, which is not a very favourable site for solar energy. We are carefully examining all possibilities,” he said.
