13 Mar 2018

Last three months (Dec 2017-Feb 2018) have witnessed a surge in solar tender issuances with a total of 11 GW of project development tenders. This compares to annual average of just 6 GW over 2016 and 2017. The surge has come as a respite for project developers eagerly waiting for new projects to bid for.

Figure: Monthly issuance of project development tenders in 2017 and 2018, MW

Source: BRIDGE TO INDIA research

Note: The figure excludes tenders that were announced and subsequently cancelled

Slowdown in tenders in late 2016 and 2017 drove developers to bid aggressively with winning tariffs of INR 2.47-2.65/ kWh. The surge in new tenders is a positive development for the sector and is in line with MNRE’s new roadmap of issuing 17 GW of tenders between December 2017 and March 2018. But progress on auctions and PPA execution is likely to be stalled because of uncertainty about safeguard and anti-dumping duties. Karnataka is the only state to offer change in law protection to developers against this risk. But other procurement agencies including SECI remain reluctant to do so. As a result, bid submission timelines for most tenders have been extended multiple times. We expect allocations to be held up until there is clarity on the duty imposition decision.

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