Rooftop Solar Installers Seek Extension to Complete Projects Without Losing Subsidies
A lack of interest by concerned ministries is the main reason installers are seeking this extension
Rooftop solar installers in the country who had won bids to build rooftop projects on government buildings have now sought more time from the power ministry for the completion of the assigned work.
The Distributed Solar Power Association (DiSPA) has written to the Minister of Power, R. K. Singh, to extend the project completion timelines for rooftop solar projects by six months. These projects were awarded by the Solar Energy Corporation of India (SECI).
In a letter dated May 11, 2018, DiSPA communicated the grievances of rooftop solar installers to the government, stating, “From the date of issuance of LOA (Letter of Allocation), installers are struggling with numerous issues which have delayed the execution of the Power Purchase Agreements (PPAs) with the government organizations.”
DiSPA reasons that an additional six months will greatly impact the rooftop industry as a lot of resources, manpower, and hard-work have already gone in to reach this stage. It will help achieve the twin objectives of both the promotion of rooftop solar and a significant cost reduction for government entities. DiSPA has asked Singh for support, which will enable installers to execute the projects without affecting the eligibility of the full subsidy.
In the letter, DiSPA mentioned the following issues concerning the project installers:
- Non-feasibility of identified roofs in RfS for setting up projects
- Loss of considerable man hours in accessing the above said identified roofs
- Lack of awareness and interest in the scheme by concerned ministries
- Significant delays in securing internal approvals within the government departments for PPA
- State specific hurdles in implementing this scheme
- Slowing down of the appraisal process by the banks
- Delay in operationalization of SECI’s on-line web portal for project sanction
“On multiple occasions, bidders have brought these issues to the attention of MNRE and SECI and a significant time has been consumed in arriving at common solutions. This has left a short window for the installers, and commissioning of allocated capacity is extremely difficult within the current timelines. Therefore, developers have requested SECI and MNRE to extend the timeline,” the letter went on to say.
DiSPA also stated that the program being implemented by SECI has brought the lowest tariffs in rooftop segment and utmost benefits to all government organizations through a transparent competitive bidding process. The letter highlighted the fact that the MNRE has discontinued subsidies for rooftop solar projects at government organizations, and similarly low tariffs may not be possible for future programs.
The association noted that over 95 MW of rooftop PPAs have already been signed with government clients and another 100-120 MW are in the pipeline, which would be signed in next 30-45 days. “This is a landmark development in the promotion of rooftop solar projects in the country,” the letter observed.
However, DiSPA has raised its concerns regarding the implementation of these projects. Elaborating on the hurdles and challenges faced by the project developers, the letter noted, “The large clients are major colleges and organizations which have multiple roofs and multiple processes for implementation. Also, most of the PPAs have been signed in the last two months. Implementation of these highly complex projects within June is near impossible. Hence, we request that the bidders may be given additional timeline within the ambit of the scheme validity (i.e. December 2018) without affecting the eligibility of subsidy. Any projects completed beyond that deadline may be rejected out-rightly and will not be considered for any incentive.”
When contacted, an MNRE official told Mercom, “The program does not have a provision for extensions. The installers knew this, and they should have achieved the targets within the specified timelines.”
When informed that DiSPA has also approached the Minister of Power for this issue, the MNRE official chose not to comment.
This is not the first time DiSPA has sought intervention for the implementation of this program. In April 2018, DiSPA wrote the first letter to MNRE seeking an intervention in the matter.
In its first letter, DiSPA had requested immediate intervention by the MNRE to extend the current commissioning timelines, enabling the installers to execute the allocated capacity. The association also requested MNRE to extend the timeline for commissioning of allocated capacities to March 31, 2019, from the current date of June 30, 2018.
A delegation consisting of representatives from various rooftop project developers including Sunsource Energy, Azure Power, ReNew Power, TEP Solar India Mauritius, Cleanmax Enviro Energy Solutions Private Limited, and Amplus Energy Solutions Private Limited would be meeting MNRE and SECI officials to discuss the matter, the association had communicated to the government in its April letter.
Recently, Mercom reported that subsidy disbursement delays by government agencies to rooftop installers is hampering rooftop solar growth. India’s rooftop installations grew by 56 percent year-over-year to reach a cumulative total of nearly 1.6 GW on December 31, 2017 according to 2017 Q4 Solar Market Update.
Image credit: Flickr
Saumy is a senior staff reporter with MercomIndia.com covering business and energy news since 2016. Prior to Mercom, Saumy was a copy editor at Thomson Reuters. Saumy earned his Bachelors Degree in Journalism & Mass Communication from the Manipal Institute of Communication at Manipal University. More articles from Saumy Prateek.