What Developers are
- Delays in state government projects are common.
Land acquisitions are a big problem in states.
- Grid connection and evacuation is a big issue
that needs to be fixed. Solar projects are completed on time but are waiting
for grid connection for months without the benefit of deemed generation.
- PPAs are one sided – developers are facing the
threat of losing performance guarantees, but DISCOMs are not penalized for
- In Tamil Nadu some solar projects are being
asked to back down about 50 percent of generation without compensation. The
state is opting for cheaper power from the exchanges instead of honoring solar
PPAs it signed.
- Developers hope that a ‘Change in Law’ clause in
PPAs will protect their interests from GST impact.
- NTPC and SECI tenders are usually delayed, which
is a burden on developers that have to spend a lot of time working on
submitting these tenders.
- Developers prefer NTPC projects over SECI
projects as VGF is disbursed over five years and the process is complicated.
- Solar parks are getting better at not rushing
the auctions until grid connectivity is ready. Parks are taking away the risk
of land acquisition and evacuation but they are expensive.
- Three to six month delays are expected during
commissioning due to grid connection issues in some areas. There are no
significant curtailment issues outside of Tamil Nadu and Rajasthan.
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What Banks are saying
- Projects below Rs.5 (~$0.0746)/kWh are not
reaching financial closure yet.
- Payment cycles are getting better; there are
some rare cases with 45-60 day delays.
- Tamil Nadu’s DISCOM is unpredictable with payment
delays and curtailment.
- Lenders are offering loans for 15 to 25 years
for projects in solar parks.
- There are a lot of new developers entering the
sector, but lenders are more comfortable with proven, experienced project
- Developers should utilize buyers’ line of credit
for the initial years of project.
- UDAY has not yet shown positive effects on