Mercom India Research has said in its report that last year the highest solar capacity has been added in the country so far. Solar accounted for 62 per cent of the new power capacity. Large scale solar projects accounted for 83 per cent of power installations during the last year, which is an increase of about 230 per cent on a year-on-year basis. Rooftop installations increased by 138 percent. Rajasthan, Karnataka and Andhra Pradesh were the major states in terms of capacity for large scale solar projects. They contributed about 50 percent of the solar capacity installation. The report states that Rajasthan was at the forefront with solar capacity installation of 4.5 GW last year.
Demand for solar power is expected to remain strong this year. However, the industry may also face some challenges. These include basic customs duty, restrictions on imports and taxes. Apart from this, problems related to the supply chain may also remain. The industry will also have to deal with the problem of costlier commodity prices.
The report said that the average cost of solar projects last year was high. The cost has been impacted by rising raw material and freight prices. Last year, tenders for solar projects declined by 4.3 per cent and auctions by 2.6 per cent. Delays in signing power sale agreements (PSA) and unclear charges on these projects have led to a decline in tenders and auctions. The central government has taken measures to increase the capacity of renewable energy. This is likely to increase solar projects. However, importing critical equipment used in these projects can be a major hurdle. Most of these equipments are imported from China. Due to the import duty on these equipment, their price remains high, which increases the cost of the project.
(This news has not been edited by NDTV team. It has been published directly from Syndicate feed.)<!–
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