The recent tenders issued by the Solar Energy Corporation of India (SECI) for 500 MW rooftop solar PV projects is likely to give a boost to the sector, which will also be helped by falling costs and increase in retail tariffs, a report said.
The tenders are likely to help the domestic rooftop solar power expansion programme, according to the report by ratings agency Icra.
It added that the sector is likely to get a further boost due to the falling capital cost of solar projects and the trend of increase in retail tariffs, which is making rooftop solar competitive for some consumer categories.
"Given that existing grid connected solar rooftop capacity is at 166 MW as of February 2016, tendered capacity by SECI implies a significant jump," Icra Ratings Senior Vice President Sabyasachi Majumdar said.
He, however, noted that implementation of such projects by the bidders in the stipulated timeline remains critical, given the clause of liquidated damage for delays in place.
Further, the ability to maintain the operating performance within the stipulated parameters remains crucial for the bidder, both for recovery of subsidy as well as performance bank guarantee from SECI, Majumdar said.
The tender for these 500 MW rooftop PV projects is through a mix of two routes -- the Capex route (300 MW) and RESCO (Renewable Energy Service Company) route (200 MW).
The successful bidders are also eligible for subsidy support from the Ministry of New and Renewable Energy (MNRE).
For both the Capex and RESCO models, the bidders are to be selected through competitive bidding.
"The government has increased the budgetary allocation for subsidy support to the rooftop solar segment from Rs 600 crore to Rs 5,000 crore till FY2020 which is expected to facilitate rooftop capacity addition by about 4,200 MW. With subsidy support in place, SECI's tendered quantity is entirely domestic content-based," he said.
Majumdar, however, noted that the implementation of net metering regulations remains a key regulatory concern.
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