25 GW Of Solar Power Projects May Never See The Light Of The Day

25 GW Of Solar Power Projects May Never See The Light Of Day

According to industry officials, at least 25 GW of solar power projects are facing delays or uncertainty due to a rise in module pricing or supply shortages. The cost pressures are severe for projects that won contracts by quoting high pricing in Solar Energy Corp and GUVNL’s 2020-21 auctions.


By now, these projects should have been either commissioned or in advanced stages of development. Because the Basic Customs Duty (BCD) was not a pass through under the legislative amendment for these projects auctioned in 2020-21, they have become unviable and may not be implemented.

Beginning in April of this year, India slapped a 40% BCD on the import of solar modules and a 25% BCD on the import of cells in order to stimulate local production.

Over the last 4-5 months, solar power producers have made repeated recommendations to the government, requesting a two-year exemption from increased import taxes and required equipment procurement from a government-approved list of models and manufacturers.

They have also requested that previous bid projects be exempted from the new tariff structure.

A almost 40% increase in module pricing owing to strong demand post-Covid, delays in polysilicon supply, and an unprecedented spike in ocean freight charges and commodity prices such as copper, silver, and steel have all contributed to the cost. The rupee’s near-7% devaluation this year, along with a higher GST rate, has driven up project costs even more.

The Center was aware of the challenges, and the requests of the solar power sector were being considered,  a senior government official said.

Reference- Economic Times, Mercom India, JMK Research, The Hindu, Business Standard