All is not well with the Indian solar industry. When US-based SunEdison declared bankruptcy on April 21, wiping out nearly $10 billion in market value, a pall of gloom descended over the industry.
Solar projects are making headlines and tenders are being floated at an unprecedented pace. The goal post set by the government is at 100GW by 2022 and carries an investment tag of ₹6.04 lakh crore ($90 billion). It appears a new sun is indeed rising for solar power in India.
Pundits claim India is set to become the fourth largest solar market globally in 2016 behind only China, the U.S. and Japan with 5.4GW of expected capacity addition this year. A report by Bridge to India (BTI) says key policy changes have been introduced and 25GW of projects are under different stages of development. Thirty-five new tenders with a cumulative capacity of 15.5GW were announced last year. An additional 5GW of new tenders are awaiting release in the coming months. There is investment interest both from Indian and international developers in the sector. This frenetic pace of activity is a big step-up in contrast to historic solar capacity addition of about 1GW/year for three straight years until 2014, the BTI report says.
But all is not well with the country’s solar industry. SunEdison’s 97 solar projects, worth 897MW of operational and near-operational capacity, are burning up or just hanging fire since its bankruptcy and there are several other projects that, having won tenders, are not even near the construction stage. Here are some of the larger projects that have won tenders but show no sign of execution or commissioning.
- In Oct 2014, SunEdison won 150MW (for a 500 MW tender that was shared by Azure Power, Welspun and other developers) in Karnataka. Nothing has yet been commissioned. Apart from about a 30MW unit, which was just about getting ready, everything came to a standstill after SunEdison filed for bankruptcy. Their partners are silent.
- Madhya Pradesh had called for a tender of 300MW about 13 months ago. The largest capacity of 150MW was won by a Canadian solar power developer SkyPower Global. By now, at least some form of construction should have begun. Zilch on that front. Add to this, newspapers are reporting that SkyPower may be looking to offload equity in the project and may subsequently exit.
- SunEdison had won the entire 500MW tender called by Andhra Pradesh in November 2015 for a record low tariff of 7 cents (~₹4.63) that then broke new ground for the Indian solar industry. Ideally, the PPA should have been signed by SunEdison with the state government, financial closure achieved by now with commissioning date set to the first half of 2017. SunEdison’s bankruptcy has ensured that this project is a non-starter.