Solar sector to see capacity addition of 5.7 GW in FY17: Icra

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Domestic Solar

The country’s solar sector is expected to see capacity addition of 5.7 GW in the current fiscal, even though aggressive tariff bids may cast a shadow on profitability of producers, rating agency Icra said on Wednesday.”Going by the project awards and tenders floated as on date, about 5.7 GW capacity addition is expected to happen in FY17. But actual capacity addition will hinge on timeliness in the award of projects under state and central policies and the subsequent signing of PPAs,” Icra Senior Vice-President Sabyasachi Majumdar said.The rating outfit estimated that assuming a 7% annual demand growth, an extra 78 GW in solar energy capacity would be required over the seven-year period (FY16-FY22) to hit the revised solar RPO (renewable purchase obligation) target of 8% by 2021-22.Icra, in a report, however, warned that the tariffs being quoted by successful bidders are very aggressive and the viability of such competitive bids hinges on keeping cost of modules and financing within budgeted levels. Amendments in the solar RPO norm from 3 to 8% by FY22 in the national tariff policy is a key positive for the solar energy sector, it said.This should facilitate capacity addition in line with the revised capacity target of 100 GW by FY22 (earlier 22 GW) under the National Solar Mission (NSM),” it said.

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