Altier

The solar industry is returning back to normalcy and work has picked up on multiple projects around the country to meet the MNRE’s extended timeline of 31st March 2021.   One such ambitious project was a 200MW capacity to supply power to Uttarakhand Power Corporation Ltd (UPCL), an A+ rated distribution company, tendered out by Uttarakhand Renewable Energy Development Agency (UREDA) in 2019 last year. The tender was specifically designed to encourage participation for Uttarakhand (UK) domicile residents and landowners, allowing bidding between 100KW to 5MW capacity on individual net-worth basis. There is a further capital incentive provided upto 30% of the project value provided by UREDA to the project developer. The tender was oversubscribed by 30MW and is especially lucrative during this time as prices have fallen over the last year. The winning the bid was just the first step towards availing the benefits of high capital returns from renewable energy - the winners must now overc...

  In the recent rooftop solar map published in June 2020 , Bridge to India, a leading research publication, noted that almost 70% of cumulative project capacity developed has been on the CAPEX business model - where the consumer pays for the entire cost of the project upfront. The publication further noted that OPEX/RESCO model however has been gaining traction over the past few years, rising from 13% market share in 2016 to a remarkable 39% in 2020. This growth can be attributed to the funding in the renewable energy sector over the last 4 years, yet if you look closely at the graph below - you see a stagnation in the growth of the opex model over the last two years, which leads us to question if the long term power purchase agreements have reached their peak and if capex with collateral free loans can be a far more attractive option for consumers. Let us evaluate and show the project economics in the later part. Loan economics for Capex projects The ROI for an investment in solar...