Sunday, July 9, 2017

ECONOMIC CHALLENGES IN THE WAY OF SOLAR PROJECTS

  Nearly all the new solar power projects which are recently commissioned or in the process of commissioning  throw up a new set of challenges to the  parties concerned.

  The state EBs (Electricity Boards), which have already concluded power purchase agreement with the Solar power generating companies  face the problem of being locked in with a higher power purchase rate per unit for a long period which may extend from 15 to 25 years, while the newer projects which are coming on stream are offering power at a much cheaper rate per unit of power.

  The issue generally faced by the Solar power generating companies is that the power generated by them is largely supplied to the state EBs who are the primary customers.The EBs them selves are largely in debt and incurring heavy losses due to T & D losses and  power theft. Such being their poor  financial health, they are not able to release regular and timely  payments to the solar power companies. Often the delay in release of payment is six months or more which is causing financial stress in these newly set up companies and impinge on their profitable operation.

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