Oct 1, 2012 - Newly added solar photovoltaic (PV) capacity in India for the third quarter of 2012 was only 67.25 MW, compared with 340.62 MW in the previous three-month period, according to the quarterly report of solar market consultancy Bridge to India.
The figure is even further behind the 401.74 MW put online in the first quarter of 2012. The decline was due to a drop in project allocations in the first three quarters of 2011 after a record 1.1 GW of projects allocated near the end of 2010 under the Gujarat Solar Policy and the National Solar Mission.
This market development has led to increased interest towards the development of solar parks under the Renewable Energy Certificate (REC) mechanism. In India, firms that produce green electricity but do not take advantage of feed-in tariffs receive RECs per MWh generated. RECs trading takes place on the last Wednesday of each month.
However, the market researcher notes in its report, called India Solar Compass, that despite growing interest, the REC market is yet facing huge challenges. For one there are the uncertainties surrounding the implementation of the Renewable Purchase Obligation (RPO) scheme under which distribution companies and certain consumers are obliged to source a set percentage of their power from renewables. "A project based on the REC mechanism in its current form is not a very viable option," the analyst said.
The India Solar Compass points to increased opportunities for domestic solar product makers. Nearly 70 MW of solar equipment has been sold up to now to National Solar Mission batch two, phase one projects, while nearly 200 MW have been contracted by international manufacturers. This is an improvement on previous quarters when most production lines were working at less than 15% capacity utilisation. Furthermore, to stimulate local demand the Ministry for New and Renewable Energy is expected to boost the domestic content requirement (DCR) in the second phase of the solar mission.
Bridge to India emphasised that to be competitive Indian firms needed to look beyond DCRs and enhance their competitiveness in terms of the global market.
Choose your newsletter by Renewables Now. Join for free!
