Impact of Covid-19 on Rooftop solar Plants in India.

Impact of Covid-19 on Rooftop Solar Plants in India.

As Nasdaq. Sensex and Nifty showed yet another downward trend, it is quite sure that not only the domestic economic scenario but that across world has affected badly. There would be a challenging time for solar plants especially Roof top Solar plants since tiny industries may go insolvent or leave the trade in total as of the present lockdown. A brief note on Indian Roof top solar projects in post Covid-19 scenario.

India:

With more than 80% of solar cells and components used in Indian projects importing from People’s Republic of China,  the Corona virus outbreak has hit  solar industry in a thorny situation , with the worst hit being rooftop sector players, because most of them are small sized companies. Minor rooftop company don’t have the fiscal support to put up with losses or rally  the additional operational investment necessities. They are also doubtful about any fiscal support from the Government or banks. About ten leading companies supply components of about 25% of rooftop solar installations in India. It is quite probable that tiny companies may go insolvent or leave the business in total given that the impact of  current lockdown.

It is apprehended that the consequence on the housing rooftop solar market may be damaging since people do not have the capacity to afford additional investment and they are observing how the western countries trying to overcome this crisis, for which no tangible way out is arrived yet. Hence the people of India likely to believe that Rooftop solar is not a burning requirement and concerned about post Covid-19 situation and financial wellbeing thereby chances of holding up  projects of rooftop solar plants. Total domestic rooftop solar capability stands at 710MW as of September 2019.

As a colossal assistance for solar developers, the Ministry of New and Renewable Energy (MNRE) is expected to frame fresh guidelines for solar projects on post Covid-19 scenario covering extension of timelines for completion of projects without the risk of penalties. Government of India has already classified lock down due to Covid-19 as a force majeure condition in all trades and works i.e. beyond human control such as wars, riots, crimes, or natural calamities, which absolve both the parties from contractual accountability. This is a deviation from standard terms of Power Purchase Agreements [ PPAs],  i.e. if a project developer does not complete the project in a particular timeline, it pull towards penalties or even end result in termination of contracts..

It is also observed that several consignments are held up or in transit due to spreading of corona virus, resulting inordinate postponement of the Roof top solar projects in India. This may also result into amplified impact on the financial side of the current projects. The outbreak of Covid-19 has knocked the international supply chain restricting the movement of PV modules, cells, accessories, solar inverters etc. mainly being supplied from China which comes to about 80 per cent of India’s solar sector tie up and imports from other countries. The only ray of hope is the proposed guidelines which could relieve some of the predicament on the roof top solar sector in India.

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