Government plans global tender for solar projects

The government is planning to invite a global tender, said to be the world’s largest, for setting up 20 GW (gigawatts) capacity of solar power projects. The move, first of its kind in the country, will be floated by the Ministry of New and Renewable Energy (MNRE) and will give a huge fillip to domestic manufacturing, in tune with the Prime Minister Narendra Modi’s “Make in India” mission. India has an ambitious 175 GW clean energy target by 2022, of which 100 GW will come from solar projects. However, at present, solar power developers have been sourcing solar equipment from countries like China, where they are cheaper. Mega tenders, according to sources, will result in substantial reduction in tariffs of solar power. Solar panels account for about 60% of a solar project’s cost. China is a leading manufacturer of solar panels and exports them to countries like US and India. The global tender, which will be spread over 2-3 years, is likely to provide the much needed trigger to manufacturing of solar panels and ancillaries.

Dhruv Sharma, coordinator of the Indian Solar Manufacturers’ Association (ISMA), said that besides giving a boost to the domestic market, the global tender will also encourage big, foreign players to invest in the country. “It’s a very good plan of the government which will lead to an increase in demand visibility. Manufacturers are eagerly waiting for this,” said Sharma, who is also the CEO of Jupiter Solar Power Limited.

“While domestic manufactures will be encouraged to expand their existing capacities, foreign companies would like to set up their projects in India. Besides, this will also lead to setting up units for manufacturing ancillaries, like vapour, cell, gases, chemicals, silver and aluminium paste required for solar cells; and aluminium frames, solar gas and back sheets for solar panels/ modules. Thus, the entire ecosystem will see expansion,” said Sharma.

There has been significant improvement in India’s position in the solar power sector.

According to the Ministry data, the total installed solar energy capacity is over 13,500 MW, which was 3,743 MW in 2014-15. States like Andhra Pradesh, Gujarat, Karnataka, Madhya Pradesh, Rajasthan, Tamil Nadu and Telangana have crossed the solar installed capacity of 1 GW (which is equal to 1,000 MW). Prices of solar power have come down significantly to Rs 3.10-Rs 3.20 per unit, which is very competitive with thermal power.