While most sectors saw an investment famine, the solar sector was looking up, but slowdown may be in the horizon for this sunrise sector as well. In a stark contrast to the situation in FY17 and FY18, many recent tenders floated by the Solar Energy Corporation of India (SECI) — the government’s nodal agency for renewable energy — have remained undersubscribed. (see chart).
The trend is attributed to delays in payments by state-run distribution companies (discoms), laxity in issuing tariff orders on the part of state electricity regulators and reopening of power purchase agreements (PPAs) by Andhra Pradesh and Uttar Pradesh. Industry sources also blame the rising complexities related to land acquisitions, abrupt curtailment of purchase by discoms and mandatory tariff ceilings under auctions for waning investor interest.
