The Solar Mirage

India’s solar capacity addition is slowing as viability of projects and host of other issues trouble developers

- P.B. Jayakumar

ACME Solar, one of the largest solar power companies in India, shook up the sector three years ago. It bagged a contract from state-run Solar Energy Corporation of India (SECIL) to set up a 200 megawatt (MW) plant in Rajasthan with a bid of ₹2.44 per unit. This was the lowest tariff quoted for solar power in India. It triggered a price war and steeply reduced solar energy prices in India.

In the first week of May, ACME decided to terminate the contract by invoking the “force majeure” clause citing coronavirus. The reasons it gave included over 15 months delay in land acquisition, impact of coronavirus outbreak on suppliers of solar cells and modules from China and delay in setting up of transmission networks. It is reportedly trying to monetise some of its projects.

In another development a month ago, Shapoorji Pallonji Infrastructure (SP Infra) sold its five operational solar energy assets, including 169 MW in Maharashtra and 148 MW in Tamil Nadu, to global investment firm KKR, for ₹1,554 crore. It was one of the largest deals so far in India’s solar power segment involving a private equity player.

On February 6, billionaire Gautam Adani-promoted Adani Green Energy sold half its stake in 2,148 MW solar power assets to Total Gas & Power Business Services SAS for $510 million. It was one of the largest deals in India’s solar energy space, after Tata Power’s acquisition of Welspun Renewables for ₹9,249 crore in 2016.