Uncertainty over micro-grids future, roadblock for the sector
KOLKATA: Uncertainty around tariff payment and its future in case grid power reaches villages, are major areas of concern plaguing the micro grid sector, according to Feedback Business Consulting.
“The biggest challenge in operating a micro-grid is the uncertainty around tariff payment and the absence of large commercial loads in villages. Developers wants to ensure steady recovery of their capital investment and requires funds for maintenance. This uncertainty increases the risk profile of the project significantly,” said analysts from Feedback Business Consulting.
The second challenge is in the form of sustainability of the venture in case grid-power reaches the village and villagers decided to switch to the grid network due to lower tariff.
“There are no proper exit strategy. Most developers are waiting for regulations from the government so that they can sustain business over long term,” he said.
Most of these projects hold considerable risks and developers, mostly small time private entrepreneurs should have access to cheap loan.
Another challenge is to ensure security of the assets. Many developers, according to the report, have filed cases of asset theft, and breakage of solar panels. Other challenges include receiving approvals for laying underground cables when the network crosses any highway, less or no growth in electricity demand from the villagers and limited scope of expansion to other villages.
“The biggest challenge in operating a micro-grid is the uncertainty around tariff payment and the absence of large commercial loads in villages. Developers wants to ensure steady recovery of their capital investment and requires funds for maintenance. This uncertainty increases the risk profile of the project significantly,” said analysts from Feedback Business Consulting.
The second challenge is in the form of sustainability of the venture in case grid-power reaches the village and villagers decided to switch to the grid network due to lower tariff.
“There are no proper exit strategy. Most developers are waiting for regulations from the government so that they can sustain business over long term,” he said.
Most of these projects hold considerable risks and developers, mostly small time private entrepreneurs should have access to cheap loan.
Another challenge is to ensure security of the assets. Many developers, according to the report, have filed cases of asset theft, and breakage of solar panels. Other challenges include receiving approvals for laying underground cables when the network crosses any highway, less or no growth in electricity demand from the villagers and limited scope of expansion to other villages.
