5,200 MW solar capacity to be added in 2016-17: CARE

The country is set to add 5,200 MW solar capacity this fiscal with various states coming out with policies for the sector, CARE Ratings said.
According to a study conducted by the ratings agency, out of total installed renewable energy capacity of 42,750 MW as on March 31, the share of solar energy increased to 15.82 per cent, as against 13.8 per cent in 2014-15.
Various states such as Andhra Pradesh, Chhattisgarh, Gujarat, Jharkhand, Karnataka, Madhya Pradesh, Odisha, Punjab, Rajasthan, Tamil Nadu, Telangana and Uttar Pradesh have come out with policies for awarding solar power projects.
Also, government entities like NTPC and SECI have come out with tenders of large capacities in GW size, including those in solar parks.

"After witnessing record capacity addition of around 3 GW in FY16, 1,000 MW in the first quarter of this fiscal, and bids of around 6,000 MW awarded over the last six months or so, the solar sector is on a strong growth path.
"Nearly 5,200 MW is likely to be added this fiscal and 8,000 MW in FY2016-17," it said.

Further, the Modi government's ambitious target of 100,000 MW solar capacity by 2022 has attracted serious interest from various players, domestic as well as overseas.
The sector is witnessing increased participation from large overseas investors and developers, such as ADIA, CLP, EDF, ENEL, Engie, Fortum, First Solar and Goldman Sachs, while large domestic business houses have also laid down ambitious plans for solar capacity addition.

CARE Ratings further noted that solar PV project costs
have witnessed a sharp decline over the years which has led to shift from preferential feed-in-tariffs to competitive bidding.
"Apart from decline in solar PV project costs, entry of various players has led to significant increase in competition which has led to significant decline in solar tariffs as visible from the trends in the completed bids over the last 9-12 months," it said.
The ability to manage cost efficiently, secure longer tenure and cheaper debt are the key factors which will have bearing on the bids, returns and viability of the projects, CARE said.

It further noted that the capital cost for setting up a solar PV project has been coming down over the years.
CERC's benchmark project solar PV cost has come down from Rs 6.1 crore per MW for 2015-16 to Rs 5.3 crore per MW for this fiscal, with cost of modules declining marginally while civil and other costs have witnessed a steeper fall.