Key chal­lenges

Electronics For You - - Efy -

De­spite the ro­bust gov­ern­ment back­ing, the mar­ket is hin­dered by high cap­i­tal re­quire­ments and the risks posed by the lack for grid par­ity of large so­lar farms. Most de­vel­op­ers faced is­sues with fi­nan­cial clo­sure. There is an over­all re­luc­tance on the part of fi­nan­cial in­sti­tu­tions to lend to so­lar projects. Banks are ask­ing for large col­lat­er­als to the ex­tent of over 110 per cent and are reluc­tant to fi­nance purely on the ba­sis of power pur­chase agree­ments.

In ad­di­tion, the in­ter­est rates are also very high with some banks fund­ing at rates as high as 15-16 per cent. Mar­ket par­tic­i­pants will have to sort out the af­ford­abil­ity is­sue if they de­sire wide- scale de­ploy­ment of ru­ral elec­tri­fi­ca­tion pro­grammes.

Pol­icy and pro­ce­dural de­lays are caus­ing ma­jor prob­lems in com­ple­tion of land trans­fer and this has a domino ef­fect, lead­ing to de­lays in fi­nan­cial clo­sure and con­se­quently de­lays in com­mis­sion­ing of the project. In ad­di­tion, there are de­lays in get­ting clear­ances, like the Pol­lu­tion Clear­ance Certificate from the con­cerned agency. Be­sides, there is no clar­ity on the ap­provals re­quired. For in­stance, few peo­ple know that projects un­der 5 MW do not re­quire a pol­lu­tion clear­ance certificate.

The coun­try also lacks a well de­vel­oped trans­mis­sion and dis­tri­bu­tion (T&D) net­work for evac­u­a­tion of so­lar power from re­motely lo­cated plants.

These is­sues need to be ad­dressed to en­sure that the so­lar mar­ket in the coun­try con­tin­ues on its growth tra­jec­tory. —Ra­jesh Menon, deputy di­rec­tor gen­eral,

Con­fed­er­a­tion of In­dian In­dus­try (CII)

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