19 Aug 2019

After a slow 2017-18, rooftop solar tender issuance activity picked up again in 2018-19. Central and state government agencies issued a total of 804 MW (CAPEX 291 MW, OPEX 513 MW) of rooftop solar tenders in the year, up 64% on previous year.

Figure: Rooftop solar tender issuance, MW

Source: BRIDGE TO INDIA research

Note:  Tenders below 5 MW capacity are excluded from this chart.

Various central government agencies issued tenders totaling 225 MW for government buildings and railways, 35% higher than in the previous financial year. The largest tender was issued by SECI for 97 MW, followed by Railway Energy Management Company Limited (60 MW), REIL (50 MW), and IIT Kharagpur (5 MW).

The state government entities also issued substantially higher capacity at 579 MW, up 79% over previous year. Gujarat Energy Development Agency issued the largest tender of 125 MW for residential, institutional and social sector consumers. Many other states including Uttar Pradesh (100 MW), Chhattisgarh (50 MW), Tamil Nadu (50 MW), Delhi (65 MW), Andhra Pradesh (15 MW) and Madhya Pradesh (10 MW) also issued tenders on behalf of private consumers. Telangana issued a 31 MW tender for government buildings followed by All India Institute of Medical Sciences, Haryana for 10 MW.

Figure: State government tender issuance, MW

Source: BRIDGE TO INDIA research

Note:  Tenders below 5 MW capacity are excluded from this chart.

Figure: CAPEX and OPEX share, MW

Source: BRIDGE TO INDIA research

The ratio of OPEX model based tenders has gone up slightly from 50% in FY 2018 to 62% in FY 2019.

The tendering activity picked up after a directive issued by MNRE last year to state nodal agencies and other departments to use competitive bidding procedure to allocate capacity. The growth may also have been partly caused by planned phase out of all capital subsidies for public sector and institutional consumers.  The upward trend is unlikely to sustain in FY 2020 for the same reason.

The Indian rooftop solar market continues to be buoyant with annual grow rates of over 60%. But the experience with government tenders has been disappointing. Very often, installations are held up by problems in identifying suitable sites, documentation delays and poor financial viability. As a result, public sector share in rooftop solar is a paltry 14% with a total installed capacity of 619 MW as on 31 March 2019.

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