K Subramanya, CEO, Tata BP Solar
The first phase of solar missÂion policy is on the ground, 100 MW of IREDA 1/2MW projects and 150 MW of NVVN projects in solar photovoltaic anÂnÂouÂnced. The sector has witneÂssed active participation from investors, equÂally well supported by solar manufacturers.
Among uncontrollable factÂors that influenced the performance of solar PV sector in 2011, the sudden drop in demand in Europe tops the list, giving rise to huge inventories of solar cells and modules and eventually leading to dumping of modules from low cost countries like China.
The major controllable factors that governed the performance in 2011 were:
Knowing limits of reverse bidding: It was an overkill to introduce reverse bidding process in the very first phase of the Jawaharlal Nehru National Solar Mission (JNNSM), before the process can mature by seeing at least one full development cycle through, without alloÂwing awareness to the investors and more importantly, the funding community, on the technology and its performance. This resulted in unrealistic bidding from investors, worsening their chances of securing financial closure in time and at an affordable rate.
Low awareness level on “bankable” bidding rate: The impact of this is evident in the better closure rate of the 1/2MW projects under IREDA scheme (wherein it was a fixed tariff model) Vs closure rate of projects under phase 1 NVVN scheme (wherein it was reverse bidding for tariff rate).
Missing infrastructure woes: Power evacuation faÂcility in proximity to solar sites. Lack of awareness amoÂng the investor community on solar photovoltaics (PV), dependable technology, trade-off decisions etc delayed finalisation of contracts and delays in financing.
Concessional duty: While the Ministry of New and Renewable Energy (MNRE) policy is a good enabler for cost reduction, the process was quite cumbersome for a first time exercise, causing delays in year 2011.
Low contractor capability: Even the top class conÂstruction companies were not equipped with the knowÂledge base and right equipment kits for solar PV. This meant that speed of civil works was too slow compared to global benchmark. While NVVN Phase 2 policy mandates both cell and module manufactured in India, this rule is appÂlied only for crystalline technology. What about one for thin film modules?
We believe 2012 will witness a more stabilised perforÂmance, beginning with a bankable bidding process.
Leave a Reply
You must be logged in to post a comment.