India to install 2GW of solar PV in 2015 - Mercom

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India is set to double its annual installed capacity with a forecast of more than 2GW to be installed this year, up from 1GW in 2014, according to the latest quarterly ‘India Solar Market Update’ from Mercom Capital Group.

Mercom is raising its 2015 forecast up from 1.8GW due to recent developments in Tamil Nadu.

Raj Prabhu, chief executive and co-founder of Mercom Capital Group, told PV Tech he understood that Tamil Nadu had signed several power purchase agreements (PPAs), with speculation that a total of 1GW of PPAs has been signed by Tamil Nadu Generation and Distribution Corporation. It has been confirmed that 400MW of PPAs have been signed with a project commissioning due date of September 2015 in the state.

The Mercom report also covered several major policy and goal updates in the last quarter.

The Reserve Bank of India (RBI) added renewable energy under priority lending but with a cap of INR150 million (US$2.5 million) for renewable energy generators and INR1 million (US$16,393) per borrower for residential customers. Mercom said the impact of this policy would be minimal in the short term because the Indian solar market contains mostly large-scale projects at present.

Prabhu urged the government to consider increasing the cap in order to benefit large-scale projects in order to accelerate the implementation and execution of solar installations in the country.

The Solar Energy Corporation of India (SECI) announced another government programme to establish 2GW of solar PV projects with sizes of 500MW and 250MW on an EPC basis.

The Ministry of New and Renewable Energy (MNRE) announced that out of India's 100GW by 2020 target, 40GW is to come from rooftop PV. Furthermore, individual states have been asked to come out with their own policy and regulatory framework to support rooftop solar.

MNRE also proposed a subsidy cut on rooftop solar power plants to 15% from the current level of 30%. Itclaimed the lower price of components would offset the proposed subsidy reduction.

India's Ministry of Power proposed abolishing interstate transmission charges for renewable energy sources. It also proposed increasing the solar Renewable Purchase Obligation (RPO) to 8% by 2019 from the current goal of 3%, however, Prabhu said the percentage was negligible without strict enforcement of the RPO.

He added: “It is more important to put mechanisms in place which will support strict enforcement of the policy.”

The Supreme Court dismissed an appeal challenging RPO regulations in Rajasthan. It said imposing the RPO was desirable as the citizens have a right to live in a pollution-free environment. Mercom claimed this ruling could have a wider impact because there are several other similar cases pending in other state high courts.

Lastly, the Electricity Amendment Bill was passed in Parliament, which is expected to end power distribution company monopolies by separating distribution from supply in the power sector.

The report highlighted that even though announcements for various solar programmes, goals and policies have continued under the Modi administration, it has yet to call an auction during its first year in office.

Prabhu said: “Not a single auction has been held since the new government came in. They are just trying to ramp up the programme. All the states are doing their own thing, putting their own policies out there, but generally the industry is moving ahead and everyone has noticed that solar and wind are real and they have to really pay attention to it.”

The next round of the Jawaharlal Nehru National Solar Mission (JNNSM) Phase II Batch 2 programme for 3GW of solar projects could be announced any day according to the MNRE. Prabhu said that a further 2GW under Batch III is still being finalised.

He added that India has installed 3.8GW so far in five years.

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