India Could Add 7-7.5 GW Solar Capacity This Fiscal: ICRA

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56 per cent of the solar capacity auctioned in CY 2018 has been accounted for by central agencies such as Solar Energy Corporation of India (SECI) and NTPC Ltd.

India will add 7-7.5 GW solar capacity (including around 1 GW of rooftop solar) in FY 2019-20 as against a subdued 6-6.5 GW last year, according to research and rating agency ICRA.

Image for representational purpose only

Apart from the projects awarded through the bid route, ICRA expects about 1 GW to be added through open access/group captive route and grid-connected rooftop, with these additions being facilitated by favourable solar policies for open access route in a few states.

Explaining the trend, Girishkumar Kadam, sector head and vice president–Corporate Ratings, ICRA, said to PV Magazine that the tendered project awards for solar PV projects during CY 2018 stood at about 11 GW against 4.5 GW in CY 2017, providing a healthy pipeline for capacity addition over the next 2-year period.

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Kadam added that nearly, 56 per cent of the solar capacity auctioned in CY 2018 has been accounted for by central agencies such as Solar Energy Corporation of India (SECI) and NTPC Ltd, with the balance by state nodal entities/discoms under various state-level programmes.

Tariff viability
With a decline in PV module price level during CY 2018 and aggressive bidding by independent power producers (IPPs), the weighted average solar bid tariff during CY 2018 remained low at Rs 2.73/unit as against Rs 3.01/unit in CY 2017 and Rs 5.01/unit in CY 2016.

In this context, the viability of such tariffs critically hinges on timely project execution as per the power purchase agreement (PPA) timelines, availability of debt with longer tenures at competitive funding cost and the ability of project developers to keep the cost of modules within the budgeted levels.

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