The falling margins and tariff pressure have forced Indian Engineering, Procurement and Construction (EPC) rooftop solar players to shut shop over the last six months as they find it difficult to meet even their working capital and other operating expenses.
Policy decisions from state to retrospectively cancel net metering, and failure to honor the 20% to 30% capital incentives have damaged the viability of many companies that had aggressively bid for projects across the country.
More than 12 EPC players in the rooftop solar segment have either closed or are on the verge of closing their rooftop solar divisions due to tough financial conditions.
The policy uncertainty and reluctance from states to push rooftop segment thus providing long term clarity to this sector has led to negative sentiments across all stakeholders involved in this sector.
Moreover the recent orders from states like UP, Tamil Nadu, and Maharashtra have further dampened the growth in this segment. Besides, there are very few financing options for individuals or SMEs.
Some of the reasons for poor performance of the rooftop solar sector have been non-payment of subsidies by government, which comprises 20% to 30% of the total capital cost, and non-payment of fees by off-takers.
Besides, large number of players and lower tariffs have further reduced margins for small players, making the solar projects unsustainable.
Some of the companies facing severe constraints are: Ujjas Energy, Kotak Urja, Relyon Solar, Harsha Abacus, Kirloskar Solar and 8 Minute, among others.
Reference- Financial Express, Economic Times, Bridge To India Report