The World's #1 Renewable Energy Network for News, Information, and Companies.
Untitled Document

India Risks Europe-Like Solar Slump With 28% Cut in Subsidies

India’s biggest solar power-producing state is seeking to cut the subsidized rate it pays to plants by 28 percent, joining governments from Spain to Greece backtracking on clean-energy support to lower costs.

Gujarat Urja Vikas Nigam Ltd. is asking for permission to lower the average megawatt-hour price to 9,000 rupees ($150) from 12,540 rupees, according to a petition copy obtained by Bloomberg News and confirmed by Gujarat Electricity Regulatory Commission Chairman P.K. Mishra. The government-run bulk buyer of solar power in the western state signed 25-year contracts with 80 projects, comprising 857 megawatts of capacity, since 2010.

The petition risks derailing an industry that drew $6.9 billion of investment in two years from companies including Essar Energy Plc and Tata Power Co. to make India the world’s fastest-growing major solar market, according to figures from Bloomberg New Energy Finance. Spain, after installing the most capacity worldwide in 2008, stalled growth by withdrawing support, including retroactively capping the number of hours solar plants could earn above-market tariffs.

“The petition itself will vitiate the business environment, let alone the outcome of the petition,” said Vineet Mittal, managing director of Welspun Energy Ltd., India’s biggest solar developer. “GUVNL’s proposition is not legally tenable.”

A first hearing on whether regulators will accept GUVNL’s case will be held on July 23.

‘Windfall Gains’

GUVNL argued in its petition that the project developers are earning “unjustified and windfall gains” after misleading officials on project and financing costs at the time rates were set. Project owners named in GUVNL’s petition, include Tata Power, Welspun, Moser Baer India Ltd., Lanco Infratech Ltd., Essar Energy’s power unit and Adani Enterprises Ltd. The companies declined to comment or didn’t respond to e-mails and calls except for Welspun’s Mittal.

“Regulators fix values for different parameters; developers always try to beat them,” said Ashish Sethia, Bloomberg New Energy Finance’s head of India research, yesterday. “They earn more returns than the regulator will like but it also brings efficiency.”

Regulators should have agreed to review tariffs after a certain time and to reduce them by no more than a certain percentage, Sethia said. Solar power costs fell as low as 7,200 rupees last month in bids for licenses in Punjab state.

Contract Bound

GUVNL is on the hook to pay about 16.7 billion rupees a year for solar power, more than double what it would pay were the electricity from conventional sources, estimates Nilesh Patel, chief executive officer of Movya Consultancy Pvt., a solar advisory based in Ahmedabad.

“They’re broke,” Patel said by phone yesterday. “GUVNL doesn’t have the money to pay this. It’s going the Spain way.”

GUVNL Managing Director Raj Gopal didn’t respond to an e- mail and four phone calls seeking comment.

Solar installations in Spain peaked at 2,758 megawatts in 2008 before tumbling to 69 megawatts the following year as one of the world’s most generous renewable support programs was dismantled, according to data compiled by Bloomberg. Retroactive measures reducing solar plant revenues have also been imposed in Greece, the Czech Republic, Bulgaria, and Belgium, according to the European Photovoltaic Industry Association.

Copyright 2013 Bloomberg

Lead image: Taj Mahal via Shutterstock

Untitled Document

Get All the Renewable Energy World News Delivered to Your Inbox

Subscribe to Renewable Energy World or email newsletter today at no cost and receive the latest news and information.

 Subscribe Now


Electricity Deregulation

Japan Electricity Deregulation: Birth of Municipally Owned Electric Utilities

Junko Movellan, Correspondent The upcoming retail electricity deregulation in Japan will create a way for Japanese municipal governments to produce...
Solar panel

REC Joins O Capital in Egypt to Tap Solar Panel Market in Middle East, Africa

Anna Hirtenstein, Bloomberg REC Solar ASA has signed a deal with O Capital, the renewable energy arm of Orascom Telecom Media and Technology Hold...
Solar PV

OneEnergy Seeks Authority to Build 6 MW Solar PV Facility in Southern Maryland

Jennifer Delony OneEnergy Renewables is seeking regulatory approval in Maryland to build a 6 MW solar PV facility in Somerset County,...
Solar water heating

California Regulators Propose Expansion of Eligibility Requirements for Solar Water Heating Program

Jennifer Delony The California Public Utilities Commission has proposed expanding the eligibility requirements for customers seeking ...


Canadian Solar Wins Five Solar Power Projects Totaling 185 MW in Brazil

These power projects were won under a 20-year Power Purchase Agreement (PPA) with the B...

$100 Off of 5-day Advanced PV Project Experience. Download a Topic Schedule.

Assemble, ground, energize, and commission a complete grid-tied SolarEdge system from s...

Former Australian Prime Minister Kevin Rudd talks politics of fear vs. politics of hope

Rudd, who led the Australian parliament from 2007 to 2010, told the Summit audience tha...

Intersolar AWARD „Solar Projects in India“ – Applications being accepted until September 18

The Intersolar AWARD in the category Solar Projects in India honors projects in the fie...


Washington, DC Bridges the Solar Gap

The District of Columbia has enjoyed 15 years of strong economic growth. But prosperity is spread unevenly across the...

Sell Through Hypothesis

You first learned to hypothesize, or make educated guesses, in grade school science class. Now it’s time to ref...

Cronimet / THEnergy study: In solar for mines size does not always matter - Reducing CAPEX with energy efficiency and load shifting

Munich, September 2015. Mining companies are constantly gaining interest in solar solutions because frequently solar ...

Final Program Now Available for GRC Annual Meeting & GEA Geothermal Energy Expo

GRC Annual Meeting & GEA Geothermal Energy Expo - Final Program from



Volume 18, Issue 4


To register for our free
e-Newsletters, subscribe today:


Tweet the Editors! @jennrunyon



Successfully Integrating Solar: A Proactive Approach

•      What does the increasing solar penetrati...

Solar Frontier Offsite Office at Solar Power International (2 mins....

Solar Frontier will be hosting an offsite meeting room offering our gues...

PV-Diesel Hybrid Systems to Reduce Diesel Demand

Substantial fuel cost saving potential has made PV technology the centre...


Sell Through Hypothesis

You first learned to hypothesize, or make educated guesses, in grade sch...

Vacancy? No Problem!

Have you ever tried to sell an efficiency product or service to a prospe...

Going The Extra Mile

Selling efficiency takes perseverance, creativity, and a willingness to ...


Renewable Energy: Subscribe Now

Solar Energy: Subscribe Now

Wind Energy: Subscribe Now

Geothermal Energy: Subscribe Now

Bioenergy: Subscribe Now