Why it’s worth suspending your scepticism of India’s multi-GW MoUs

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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”.

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.

Narendra Modi opened the RE-Invest summit on Sunday.
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