In September 2017, solar auction activity increased in India. Compared to the 76 MW auctioned in August, 602 MW of solar were auctioned in September.
Meanwhile solar tender announcements witnessed a huge decline in September. Compared to August in which 725 MW of solar was tendered. In September, tenders totaling 299 MW of solar were announced.
The ongoing anti-dumping investigation, higher module prices, and states forcing tariff renegotiation upon developers are a few reasons that has led to lackluster tender and auction activity. This also points towards the inconsistent way in which government agencies conduct tenders in India.
This is not a good trend for the Indian solar sector. Tenders and auctions should move at a steady pace to provide market visibility to the investors and all other involved stakeholders. If tenders and auction activity is brisk for a period and then slows, it hampers the overall progress of the sector due to the inconsistency and unpredictability.
Manufacturers are affected as this provides an unclear view of the market and makes it difficult to scale and expand at the needed time.
Developers are heavily affected by these cycles. As projects are few and far between, developers scramble for each tender further driving down tariffs to new lows, many of which may not be sustainable. A sense of desperation is beginning to set in among developers who are looking to keep their teams together who they hired in anticipation that the government would continue to auction at a brisk pace to meet the installation goal of 100 GW by 2022.
According to Mercom India Solar Project Tracker, cumulative solar installations in India have now surpassed 17 GW with over 7 GW installed in 2017 to date.
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