India has only achieved 60% of its targeted solar installation goal for Phase 1 of the Jawaharlal Nehru National Solar Mission, according to a report by clean energy communications and consulting firm Mercom Capital.
CEO at Mercom and author of the report, Raj Prabhu, blamed the situation on the Indian government “experimenting” with policy and creating uncertainty by “changing [rules] every other month”.
Considering India is an emerging solar market where the growth rate is expected to be much higher than other parts of the world, installations in 2013 will likely end up disappointing the markets, because the current “please all parties” policy regime is forgetting the key stakeholder, the consumer, said Prabhu.
The report cited the current PV/concentrating solar power split and domestic content requirements as examples of the government’s apparent inconsistencies and urged it to discontinue the split and instead allow the markets to select the most cost-effective technology.
Prabhu said that 470MW of CSP due to be commissioned under India's national solar programme by May 2013 were struggling to complete with only 50MW to be commissioned and the rest granted a 10-month extension.
In terms of the government’s domestic content requirement (DCR) policy, the report notes that there is a disconnect between the policies pursued and the original goal of procuring solar at the most cost-effective prices.
In fact, many policy changes have been contradictory, said Prabhu: “The reverse bidding process was chosen so solar could be procured at the lowest possible bids but now all efforts are being made to ensure that developers can’t access the lowest priced equipment.
“The government is desperate for foreign investments in power projects, but at the same time they scare away investors by dictating how projects are to be built and where their equipment should be made. All this has made the investment community very confused.”
Earlier this month the Indian government confirmed it would offer developers the option to bid for projects with or without a DCR to placate domestic grievances against importers of modules.
Current cumulative solar installations in India stand at 1,761MW with about 557MW installed so far in 2013. With most of the CSP projects that were due to be commissioned in May 2013 delayed, the forecast for installations in 2013 looks flat compared to 2012.