Mercom India Research believes the Indian government should give a serious push to get states to reduce regulatory hurdles with a view to encouraging the open access solar market. Pictured is a solar power plant by Rays Power Experts, one of the prominent developers in the Indian open access solar market. (Photo Credit: Rays Power Experts)
- A new report by Mercom says India had an installed capacity of 3.6 GW of open access solar till the end of 2019
- Top 5 players as listed in the report are Rays Power Experts, CleanMax Solar, Amplus, ReNew Power and Avaada Energy
- Uttar Pradesh, Haryana, Tamil Nadu, Maharashtra and Andhra Pradesh are states with friendly policies for captive and group captive solar projects under the category
- The report calls out to the government to work towards reducing regulatory hurdles in the progress of open access solar as it can help the country in its 100 GW solar power goal by 2022
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Till the end of 2019, India’s ‘open access’ solar market had an installed capacity of 3.6 GW led by the southern Indian state of Karnataka, according to a new report by Mercom India Research. However, the Open Access Solar Market in India-Key States report points out that Karnataka is now much more restrictive than in the past, when it was a safe haven for the open access solar segment due to its attractive policies. In India, captive power production, corporate power sourcing or subsidy free wholesale power projects are called open access projects.
States that have friendly policies supporting captive and group captive solar projects are Uttar Pradesh, Haryana, Tamil Nadu, Maharashtra and Andhra Pradesh where average open access tariff range between INR 3.50 and INR 5.00 ($0.047 to $0.068) per kWh. But, Mercom explains, attractive state policies haven’t really resulted in actual progress on the ground as the segment suffers from bureaucratic hurdles.
Most suited for energy guzzling industries as steel manufacturing, mining, refineries, cement manufacturing, chemical manufacturing, the open access solar market is in the need of ‘serious players’ to develop open access projects and sell power to multinational companies (MNC), reads the report. It counts Rays Power Experts, CleanMax Solar, Amplus, ReNew Power and Avaada Energy as the top 5 open access solar project developers. The largest consumers of short term open access power currently are textile and metal industries.
Currently, the open access market in the country is made up of third-party sales and captive power generation – and developers seem to prefer long-term open access power purchase agreements (PPA) as their duration runs from 15 years to 20 years.
“A sizeable investment can be unlocked from large corporates and multinationals who are ready and willing to invest in open access projects to meet their renewable obligations. Instead of encouraging and working towards the country’s goal of 100 GW of solar by 2022, states have instead erected hurdles at every step,” argues Raj Prabhu, CEO of Mercom Capital Group. “A serious push from the center to get states to reduce regulatory hurdles is needed for the open access market to take off again.”
At the end of CY 2019, the open access solar pipeline of projects under development and in pre-construction phase is estimated by the report writers to be around 1.5 GW. The report by Mercom can be purchased on its website.
In a previous report, market intelligence firm Bridge to India forecasted this segment to cross 5 GW by 2022 (see India’s Open Access Solar Capacity Reaches 2.89 GW).