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Renewable: More NPAs?

Renewable: More NPAs?

Hindsight: FY 2013-14 was a mixed year. Compared to last year, the limited capacity addition what we are seeing in this financial year are either and the solar power plants under REC mechanism, or projects that were to be executed last year or allotments done last year for execution.

The renewable energy (RE) sector was anticipating strict enforcement of the RPO regulations in line with the trajectory set by the MoP. But the state regulators didn´t abide by it and gave waivers. States miserably failed to implement the central RE policy-attributable to lack of enforcement and willingness of state bureaucracies with a characteristic of resistance to change.

The domestic manufacturing has already become sick and now is the turn of the investors in RE power generation to come under financial stress if this continues. We should be ready to see another series of NPAs in the solar segment.

FORWARD LOOK: Reforms in the tariff policies and enforcement are badly needed to safeguard this industry. We expect the budget should give conditional financial support to the cash trapped power distribution companies some financial relief so that they can implement major reforms and comply with them.

To support domestic solar PV manufacturing, the previous budget allowed for duty exemption and concessional duties only on finished components that go in the solar PV power plants. Duty exemption on the raw material of solar PV panels will make a great difference and will make this industry to grow further and to compete with Chinese supplies.

Vikalp Mundra, Jt MD, Ujaas Energy, project developers under REC mechanism, which hopes to cross 100 MW mark this year

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