India has reached 8.1 GW of cumulative solar power generation capacity and there are 14 GW of projects under development, shows a report by Mercom Capital Group.
When projects yet to be auctioned are added to the calculation, India’s solar project pipeline reaches 21 GW.
The research and consulting firm expects 4.8 GW of solar deployment in 2016 and up to 9.3 GW in 2017, it says in its quarterly update on the Indian solar market. The table shows annual installation figures between 2011 and 2017 as presented by Mercom.
||Annual solar installs
“Solar installations and its share of energy generation has picked up speed but distribution companies (discoms) continue to be a drag on the sector and are showing reluctance to purchase solar in light of low power demand and cheap power availability on the exchanges,” said Mercom CEO Raj Prabhu. He added that the central government needs to immediately take measures to restore confidence among developers and investors.
Some discoms have even started curtailing solar generation in Rajasthan and Tamil Nadu as cheaper power is available on power exchanges. This comes on top of challenges such as grid congestion and untimely evacuation.
The research company’s channel checks show that Chinese modules can currently be purchased in India at around USD 0.39 (INR 26) per watt which is “the cheapest average selling price currently anywhere in the world”. Prices are expected to go further down in the short-term because of massive oversupply in China, which is welcome news for Indian project developers, especially with the aggressive bidding in government tenders.
In June the renewables arm of Tata Power Co Ltd (BOM:500400) agreed to take over Welspun Renewables Energy Pvt Ltd in a deal valuing the target at INR 92.5 billion (USD 1.4bn/EUR 1.25bn). Mercom says there are several other deals in the pipeline.
“Companies loaded with debt are finding it difficult to grow in this highly competitive environment and we expect to see a lot more M&A activity on the project side,” said Prabhu.
(INR 100 = USD 1.489/EUR 1.354)
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