As a Scot, I'm always wary about the acronym IOU. It's pretty much meaningless and could be interpreted as “when I don't pay you back, this post-it note awards you the moral high ground”.
The moral high ground doesn't pay the bills of course. I extend this scepticism to the initials MoU. If an agreement between two institutions, be they public or private sector, has only gotten so far as a memorandum of understanding, we at PV Tech tend to interpret that as “this is not yet news”.
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MoUs might place obligations on one another that neither party wants to back down on. But the fact of the matter is that these obligations are based on face-saving and reputation, not contract law and the repercussions that follow straying from it.
Despite this, we've reported on a number of MoU for multi-gigawatt solar deployment in India in recent weeks – Reliance Power, Adani, Essel Group and before that SunEdison's manufacturing proposals.
One MoU may not in and of itself be that interesting but a series, as in India, suggests that something is afoot.
That something is the Prime Minister Modi-sponsored RE-Invest Summit underway this week. Heavyweight investors lured by the high-level attendees will be gathered under one roof with the solar pipeline the main attraction.
Companies looking to find investors need a pipeline to sell them. Publicly positioning yourself at the front of the queue for a state's solar parks is an important step towards having something tangible to show investors that you're a good bet.
Having an ambition to develop 4GW of solar in Gujarat is one thing. Having any old MoU detailing that an ambition is another; I could write an MoU now countersigned by my PV Tech colleague Ben Willis stating our intention to co-develop 4GW of solar in Gujarat.
Having a very public commitment from the chief minister of any Indian state, or from that minister's power distributor, is quite a different thing. No one can doubt the ambition of India's Union and state governments to deploy huge amounts of solar. If the RE-Invest meeting in New Delhi successfully links up investors for the intended projects in these MoUs, then their value to those shopping for projects will be proven.
