The bank is drafting a letter on the issue. Solar power developers have warned against the move hinting that it may curb enthusiasm in the rapidly advancing solar industry which is still in its nascent stage in India.
The move by Gujarat Urja Vikas Nigam Ltd, which submitted a petition this month and requested a 28 percent cut in the rate that it pays for electricity from solar plants. The Gujarat Electricity Regulatory Commission will hold its next hearing on the matter on Aug. 5.
The petition alone will have “an adverse impact on investors’ outlook,” Rajat Misra, senior vice president of the infrastructure group at SBI Capital Markets Ltd., which is the lender’s investment banking arm, said in an interview in Mumbai. “It only takes a couple of projects to go back for the entire sector to fall through.”
India joins other such European countries that have taken recourse to such measures for the solar industry.
The developers have strongly argued that tariff revisions are not possible and point out that a tariff order can be challenged within 60 days according to the rules of the state. The tariffs had been decided for 25 years and this reopening of contracts might set up a wrong precedent leading to flooding of applications and countless complaints.
GUVNL wants to cut down on tariffs because of the higher profits being earned. Solar developers however argue that each project has an element of risk and whatever profits generated belong to the person taking risk.
Reference and further reading-
Read our article entitled – Solar developer oppose Gujarat’s move to revisit solar tariffs
Did you know that cinnamon comes from the inner bark of a tree? Yep! When it’s first harvested, it’s a light color, but as it…
Regenerative agriculture is an approach to farming that focuses on restoring soil health, enhancing biodiversity, and improving ecosystem functions. Unlike conventional farming, which often depletes…
Natural coral reefs and underwater habitats have been damaged by pollution, overfishing, and climate change. To help restore marine life, people create artificial reefs using…
As the world continues to transition toward cleaner energy sources, the need for systems that can track, certify, and validate the renewable origin of electricity…
The carbon that marine ecosystems absorb and store is known as "blue carbon." The well-known idea of "green carbon," which describes the carbon retained by…
Introduction Soil testing is a crucial practice in modern agriculture. It assesses soil health, nutrient levels, and pH balance, enabling farmers to make informed decisions…