Escalating conventional fuel prices is making electricity from solar plants more attractive for State distribution utilities.

“States such as Andhra Pradesh and Telangana are increasingly looking at solar power even beyond the renewable purchase obligations (RPO) to meet their peak deficit, as the alternative gas-based power project is far more expensive,” Manoj Upadhyay, Founder and Chairman, ACME Group told BusinessLine .

“The overall energy deficit in the country is helping solar power since this is the fastest way to add capacity at a moderate tariff,” he added.

Competitive prices

According to Upadhyay, competitiveness of solar power-generated electricity is also increasing as compared to coal-based power plants with the lack of the fuel leading to imports. “Recently, the Case-2 bidding in Uttar Pradesh for imported coal-based power plants was at ₹5.50-6.50 a unit and on top of that, it carried the risk of dollar and fuel supply fluctuation. This made solar power competitive as the tariffs are around ₹7-7.50 a unit which is fixed for the next 20-25 years,” he said.

ACME Group currently has 42.5MW of solar power projects in operation and will add another 125 MW by this year end. “Around 100 MW is coming up in Rajasthan,” said Upadhyay.

The company aims to have a portfolio of 1,000 MW solar projects by 2017.

However, land acquisition remains a challenge for solar projects, according to Upadhyay. “The biggest problem apart from financial closure is land acquisition. But some states such as Madhya Pradesh have better clarity,” he said.

For financing solar projects, Upadhyay called on policy makers to separate solar and renewable energy sector from the power sector in terms of bank lending.

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