Friday, January 10, 2014: India’s first national auction of solar permits since 2011 has been known to offer improved revenue security to investors who are looking for a foothold in the market, especially because it is expected that the cost of sun power may equal that of other sources within three years in the country.
Now the State run Solar Energy Corp of India has arranged a bid on 20 January from companies to build 750 megawatts of capacity. And this will be the first time that the government will be offering as much as 18.75 billion rupees ($302 million) in grants, which is expected to cut down plant-building costs to entice participation.
“This will bring down the main hurdles to Indian solar investment, the risk cash-strapped state utilities buying the power will default, leaving plants unable to service debt,” said Vineet Mittal, managing director, Welspun Energy Ltd told Bloomberg.
This tender may still face hurdles in drawing the interest of international firms put off by a volatile rupee, uncertainty before national elections that are due by May, and also because of the fraction of the solar capacity available in China and Japan.
“Security of payment has been addressed very nicely. But I don’t expect companies to queue up. It’s not as lucrative” with panel prices recovering from record lows,” Mittal added.
