Regulatory policy

Policy stability is vital for large-scale solar installations

Large-scale projects are driving solar development in India, with a pipeline of around 57 GW at the end of the second quarter (Q2) of 2022.

For India to reach the ambitious target of 280 GW of solar power by 2030, more large-scale solar projects need to be installed.

The industry however faces a host of challenges such as supply chain constraints, rising prices, supply shortages, land acquisition and transmission issues, preventing them from increasing these figures. Basic Customs Duty (BCD) on imports, rising Goods and Services Tax (GST) rates, Approved List of Models and Manufacturers (ALMM) and delays in transmission infrastructure in Rajasthan are also considered obstacles.

Mercom India organized Solar Summit 2022 on July 28-29 in New Delhi. The summit discussed opportunities, emerging industry trends, the government’s solar installation target and supply chains.

A dedicated session on utility scale solar projects – “Growing Solar Utility Projects – Keeping the Engine on Track” – deliberated on the current scenario, risk mitigation, policy landscape and measures to overcome the obstacles to the establishment of large-scale solar projects. the development of projects.

Panelists were Dilip Nigam, Advisor, MNRE; Pradeep Kumar, Managing Director, LONGi Solar India; Sandeep Kashyap, COO, Solar Business, ACME Group; Saurabh Mehta, Manager (BD and Project), Mahindra Susten; and Vaibhav Roongta, Commercial Director, Rays Power Infra.

Priya Sanjay, Managing Director of Mercom India, moderated the session.

Policy impact

Panelists explained how policy changes have impacted the number of large-scale solar installations in the country.

Kashyap said that while policies need to be dynamic to help the sector, stability and clarity are equally important. “MNRE has, to some extent, helped most developers when it comes to providing extensions for projects on force majeure issues and GIB-related issues. As a developer, if there is a stable policy for a few years, that really helps. Otherwise, there are financial pressures to manage policy changes as commodity prices have also increased due to various supply chain issues.

Mehta agreed with Kashyap. “The government needs to make sure these changes don’t harm developers because we can’t factor in or predict these changes when taking on projects. We keep a cushion for the depreciation of the rupee, but the impact remains. When selecting large-scale projects, the focus is on reducing the levelized cost of energy (LCOE) and managing supply chain issues. For the short term after the implementation of BCD and ALMM, we need strategies such as importing cells for in-country module assembly and local procurement in part. In the long term, we need a more reliable and cost effective national component supply. »

Roongta provided a solar park perspective where more actors are involved and how frequent policy change has a broad impact. “From an EPC perspective, frequent changeovers are detrimental to everyone involved, as everyone is looking for ways to cut costs. Extending projects without proper approvals may result in penalties. Due to supply shortages and new regulations, we are juggling bifacial and other technologies to manage projects and complete them on time. He was convinced that the tariffs would become affordable with the execution of larger and larger projects.

Kumar explained how international manufacturers lost customers in the country. “Post-BCD and ALMM, we are currently going through a phase with no activity at all. We are considering a long-term plan and not only focusing on the Indian market, but also global markets for major markets. We clearly know that the intention of the government is good and aims to stimulate national manufacturing and the local economy, so we plan to create partnerships in the same direction and to expand our portfolio. In order to expand domestic manufacturing capacity, the government should consider reducing exports, providing IPLs for the whole value chain, investing mainly in R&D, providing continuous support through policies stable.

Presenting the government’s perspective on scaling up and the way forward, Nigam said, “As a sector, we have come a long way. We need to make sure that transportation planning is stronger once we know where the renewable energy projects are coming. We must guarantee a sufficient number of buyers; otherwise, it is useless to install so much capacity. More PSTN projects and hybrid networks would also help bring more DISCOMs on board. You can expect the same kind of support for domestic manufacturing as in China. We are in the process of finalizing a roadmap.

The goal of solar installation is difficult and the challenges are many. It is more vital than ever for the government to ensure that the obstacles to the expansion of the sector are removed.

In May this year, Mercom announced that India needed 14GW to meet the utility-scale solar target of 60GW by 2022 that it has set for itself, which could easily be achieved if the government facilitated the commissioning of stalled projects.

Industry stakeholders believe the government needs to change the policy regime to make the solar target of 280 GW by 2030 a reality.