Mercom forecasts about 2,150 MW in solar installations for the 2015 calendar year and expects installations in 2016 to reach approximately 3,645 MW, a significant year-over-year growth.
“There have been a number of important energy related policy announcements recently, with increased activity on the ground with tenders and auctions beginning to occur more frequently” said Raj Prabhu, CEO and Co-Founder of Mercom Capital Group.
Year-to-date, solar installations in India stand at 1,652 MW, with cumulative solar installations in the country totaling 4,816 MW.
SunEdison wins tender with the lowest bid in India to date
After several delays, The National Thermal Power Corporation (NTPC) has begun calling for tenders under the 3,000 MW Phase II Batch 2 JNNSM program. The first auction under this batch closed with SunEdison placing the winning bid of Rs.4.63 (~USD 0.071)/kWh for a 500 MW solar project in Andhra Pradesh. This bid is the lowest in India to date.
“Bids are falling faster than component costs and there is a concern that this is a race to the bottom for solar bids in India,” commented Prabhu.
“The pent up demand due to auction delays is leading to aggressive bidding in an effort to capture market share with an assumption that component costs will continue to fall no matter what. This is a risky strategy considering the global market trends over the next 12 months.”
There are about 5,500 MW worth of projects due to be auctioned off over the next several months between the NTPC and the Solar Energy Corporation of India (SECI).
Mercom’s latest updates indicate that 21 states have so far agreed to set up a total of 27 solar parks with a combined capacity of 18,418 MW. These projects are part of MNRE’s plan to set up multiple solar parks with individual capacities of 500 MW or greater.
“After three years of stagnation, the Indian solar market is set to experience strong growth over the next several years,” further commented Prabhu.