Strategies for Large-Scale Solar Project Development
The Indian solar industry grew during the second Covid-19 wave as installations increased despite the lockdowns imposed by several states. However, the industry continues to battle uncertainties due to higher component costs and logistical issues.
According to Mercom’s Q2 2021 India Solar Market Update, the large-scale solar project development pipeline stood at 52.8 GW, with 28 GW of projects tendered and pending auction at the end of Q2 2021.
The demand for large-scale projects is exceptionally high, while tenders have slowed down as the government has shifted its focus towards building domestic manufacturing capacities.
Government agencies announced tenders for 5.8 GW of solar projects in the third quarter (Q3) of the calendar year (CY) 2021, a 31% decline compared to 8.5 GW in the previous quarter.
Adding to the challenges of the developers, the average cost of solar projects has been rising. The costs have soared with the increase in the component costs led by modules and other commodities, along with a shortage of raw materials. Recently, the Goods and Service Tax (GST) Council has also recommended raising the GST on solar components from 5% to 12%.
