Lack of clarity over tax and regulations in the solar sector has pushed close to 3.5 Gigawatt of tenders to cancellation or delay for more than a year now. Of this, 980 Megawatt (Mw) of projects were under the domestic content category that has been shrouded in controversy.
Under the National Solar Mission, the Centre has kept a separate capacity to be awarded for projects built on domestic content. For the domestic content requirement (DCR) clause, the United States has dragged India to the World Trade Organization (WTO) for preferential treatment to the indigenous industry. This comes at a time when the domestic solar manufacturing has complained that “dumping of panels in India by China has hurt them and reduced their capacity utilisation by more than 80 per cent.”
Some of the cancelled tenders were for large projects announced during 2015-16 and were facing delays and uncertainty on tariff. Last year, solar tariff witnessed a record fall of 60 per cent to Rs 2.44/unit. NTPC’s 750-Mw tender in Andhra Pradesh, Karnataka and 250 Mw under the DCR category in Karnataka got cancelled after the delay of more than one year.
Three tenders for the Kadappa Solar Park totalling 950 Mw to be awarded by central agency Solar Energy Corporation of India (SECI) are now cancelled. This included 150 Mw under the DCR category. The others in the DCR category cancelled are 200 Mw project of Coal India in Madhya Pradesh, 130 Mw of NLC in Rajasthan, and 250 Mw by SECI in Karnataka, out of which the LoI has not been issued for over 600 days now. Read More…