The recently concluded bidding for Phase 2 of National Solar Mission has been more rational and shows developers have become more cautious than the previous bidding rounds, says Gensol, a leading solar energy solutions consultant and provider in India.
After analyzing the bidding, Gensol finds that though there is greater demand for open category, bidders are most likely to earn much higher returns from the domestic content requirement (DCR) category.
The bidding rate in fact shows there is higher potential in the DCR category.
The lowest and the highest bids in the open category were Rs 0.17 crore/MW (USD 0.03 mn) and Rs 1.35 crore/MW (USD 0.22 mn), respectively, whereas the weighted average winning VGF bid comes out to be Rs 1.0710 crore/MW (USD 0.175 mn).
On the other hand, the lowest, highest and weighted average winning bids for DCR are Rs 1.36 crore/MW (USD 0.22 mn), Rs 2.456 crore/MW (USD 0.4 MW) and Rs 2.1309 crore/MW (USD 0.35 mn), respectively.
After evaluating the project costs in both categories, Gensol finds that in the DCR category, the lowest bid of Rs 1.36 Cr/MW (USD 0.22 mn) is expected to earn equity IRR of over 12 percent at a project cost of Rs 6.4Â Cr/MW (DC) (USD 1.01 mn), whereas around 11 percent at a corresponding cost of Rs 6.7Â Cr/MW (DC) (USD 1.06 mn).
Moreover, the highest bid of Rs 2.4560 Cr/MW (DC) (USD 0.4 mn) is expected to earn handsome returns of over 17 percent with Rs 6.4Â Cr/MW (DC) as the project cost and over 15 percent with a project cost of Rs 6.7Â Cr/MW (DC).
These results indicate the best for long term sustainability for the Indian solar industry, Gensol said.
The DCR category uses both solar modules and cells of Indian make. During the bid, the open category was oversubscribed by almost 4 times (1390 MW), while the DCR category was oversubscribed by over one and half times (620 MW).
Over 45 percent of the total capacity on offer, was procured by leading players like ACME (60 MW), Azure (100 MW), IL&FS (40 MW), Solairedirect (30 MW), SunEdison (100 MW) have been able to etch a substantial mark in the tally.
Azure has secured the largest share under the DCR category, while ACME emerged as the largest developer in the open category, with 60 MW each.
Rajasthan and Madhya Pradesh are the most coveted destinations for the project developers. Out of the 21 allocations in the DCR category, 43 percent (9) and 14 percent (3), are expected to be raised in Rajasthan and MP, respectively.
On the other hand, the scenario is reverse in the open category where 25 allocations have been registered, with 32 percent (8) of the projects falling in MP and 28 percent (7) expected to come up in Rajasthan.