Sun shines on unknown players -Governance Now

Sun shines on unknown players

Projects under solar mission have been handed out to companies previously unknown in solar industry

Neha Sethi | January 14, 2011

While the country is celebrating solar power as the next big thing and the solar mission has been launched amid much fanfare, some experts say that the first phase of the solar mission doesn’t seem to be in good shape.

The list of projects that have been selected by NTPC Vidyut Vyapar Nigam Limited (NVVNL) under the first phase of the solar mission have been a matter of debate in the solar industry.

Experts in the industry say that the solar photo voltaic (PV) projects have been handed out to unknown companies, whose names haven’t been heard in the solar industry. The bidding for the projects, expected to generate five MW of electricity each, has been on the basis of lower tariff rates.

The top 30 companies which were able to provide the highest discounts on the tariff rate offered by the government have been selected.

Some experts also say that special purpose vehicles (SPVs) have been established by some known companies just to get a bigger share in the projects allotted. An SPV is created by an existing company for a particular project or transaction. An official from the ministry of new and renewable energy who didn’t wish to be named also said that SPVs have been created by some better known companies.

According to the NVVN rules, no company or its subsidiary was allowed to bid for more than one project of five MW.

An industry expert said that the first six companies to whom the projects have been allotted are completely new players in the industry. He added that a bad start to the solar mission and companies not being able to provide solar power at the highly discounted rates being promised can mean trouble for the solar mission.

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