Unsigned Power Sale Agreements – A Major Hurdle For Growth In The Solar Sector

The Indian solar industry added just 3.2 GW of solar in 2020 as the market slumped by 56% due to COVID-related disruptions. However, Mercom expects expects 2021 and 2022 to be two of the strongest years to date. But, the reluctance of the distribution companies (DISCOMs) to sign power sale agreements (PSAs) with the Solar Energy Corporation of India (SECI) is threatening to slow down growth.

Many renewable energy projects are staring at an uncertain future as the nodal agency has not been able to find buyers for the electricity generated by solar and wind projects.

In the bidding process that SECI conducts, the tariffs discovered are much lower than if the state DISCOMs called for those auctions. With SECI, the counterparty risk is considered lower, and the robust payment security mechanisms tend to attract competitive tariffs. Even with all these positives, SECI has been struggling to sign PSAs.

The post Unsigned Power Sale Agreements – A Major Hurdle for Growth in the Solar Sector appeared first on Mercom India.

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