Amid increasing volatility in tender issuance, auctions and issues related to GST and safeguard duty, India’s solar installations slowed down in the July-September period of 2018, officials said on Sunday.
“Indian solar market has grown spectacularly over the last four years but is struggling to sustain because of policy and execution challenges. The slowdown is worrying for all stake-holders,” consulting firm Bridge To India’s Managing Director Vinay Rustagi said.
According to the firm’s latest report, India added total utility scale solar capacity of 1.2 gigawatts in the July-September period, taking capacity addition in the first half of the financial year 2018-19 to 1.9 gigawatts.
“These numbers are down 43 per cent and 44 per cent over respective periods in 2017,” it said.
He said the industry is witnessing increasing volatility in tender issuance, auctions and capacity addition because of poor coordination between different government agencies and constraints in transmission capacity and land acquisition.
As per another report by Mercom India Research, the Indian solar market installed 1,589 megawatt in July-September, 2018. Installations declined by four per cent compared to 1,659 megawatt in April-June, 2018.
“Installations were notably lower year-over-year (YoY) compared to 2,278 megawatt installed in July-September, 2017,” Mercom Capital Group’s Co-founder and CEO Raj Prabhu said.
“Lower installation levels were not a surprise due to a slowdown in tender and auction activity in 2017. The safeguard duty, lack of clarity around GST rates and land and transmission issues have all sapped the momentum from the solar market,” he said.
He said the Indian solar industry was trying to recover from the safeguard duty announcement.
An acceptable tariff for both project developers and government agencies has been an ongoing challenge since the inception of India’s solar programme,” he said.
Echoing him, Rustagi said the Ministry of New and Renewable Energy (MNRE) has “not helped matters by failing to decisively address GST and safeguard duty issues”.
“Arbitrary ceiling tariffs and poor tender design have resulted in tenders getting routinely cancelled and/or undersubscribed. As a result, gap between tenders issued and auctions completed has been widening in 2017,” he added.