Indian solar power projects miss deadline

Bridge to India has released an analysis which states that a number of solar energy photovoltaic (PV) and concentrating solar power (CSP) projects supported by the Indian government have failed to meet deadlines and are scheduled to lose their deposits, but that the government has taken no action.

16 projects in India totaling 84 MW were chosen for migration from other incentive programs to the nation’s Jawaharlal Nehru National Solar Mission (JNNSM), however only two projects totaling 4 MW were completed by an October 15th, 2011 deadline.

"Such a scenario can set a wrong precedent for up to a 145 MW of projects under construction in the first batch of Phase 1 of the JNNSM," states Bridge to India Senior Consultant Mohit Anand. "These projects have so far struggled to obtain financial closure and are facing delays in their construction."

"Given the leniency shown to the delayed projects under the Migration Scheme, the developers of projects under the first batch of Phase 1 of the JNNSM may also find it convenient to overshoot their deadlines, undermining the integrity of the JNNSM," says Anand.

The projects all received signed power purchase agreements (PPA) from NTPC Vidyut Vyapar Nigam (New Delhi, India) on October 15th, 2010, and were given a deadline of one year from this date for commissioning.

As a result of this failure, the 14 projects are scheduled to forfeit USD 98,000 bank guarantees, but will still be eligible to participate in the feed-in tariff program. PV projects will receive tariff payments of USD 0.35 / kWh.

If these projects fall three months behind the deadline, developers are scheduled to forfeit USD 488,000, however Bridge to India notes that the exact procedure and timelines by which this might happen remain unclear.

Bridge to India also states that a senior official at India’s Ministry of New and Renewable Energy has revealed that a month after the October 15th, 2011 deadline, no action has been taken to en-cash the bank guarantees.

The JNNSM is a very ambitious program which seeks to support the installation of 20 GW of grid-tied PV and CSP and 2 GW of off-grid solar by 2022. However, the difficulty that the program has had in meeting early targets casts uncertainty on larger program goals.

Bridge to India states that it expects no more than 90 MW worth of projects to be completed by a January 31st, 2012 deadline.