INSUBCONTINENT EXCLUSIVE:
which has made imported solar modules costlier and hiked the cost of setting up solar plants, according to a report by credit ratings agency
Crisil released on Monday.The report said these projects include 5.5 giga watt (GW) of projects bid in the past nine months at very low
tariffs of Rs 2.75 per unit or less.They are in the early phase of implementation and unlikely to have bought solar modules for orders which
are typically placed 9-12 months after bids are won, the report noted."Solar modules account for 55-60 per cent of the project cost of a
solar plant, which is typically Rs 5 crore per mega watt (MW)," said Subodh Rai, senior director, CRISIL Ratings."Today, over 90 per cent of
Our analysis shows that for every 10 per cent drop in the rupee, the cost of setting up a solar power plant increases by Rs 30 lakh per MW,
assuming other factors remain unchanged," he said.Also, developers typically do not hedge the exchange rate before placing orders for
modules."If the rupee remains weak and safeguard duty is also levied, project costs would dart up by as much as 20 per cent
In such a situation, viable tariff for future projects will have to be higher by 30 paise per unit," said the agency's director, Manish
Gupta.This would impact the government's target of setting up 100 GW solar capacity by fiscal year 2022, he added.
