NEW DELHI: Rupee slide has created viability dangers for nearly part of the solar energy capacities beneath implementation, price Rs 28,000 crore, through making imported sun modules dearer and pushing up general project prices, CRISIL Ratings said in a file on Monday.
According to the file, the tasks dealing with viability dangers include the 5.5 GW (gigawatt) capacity bid out up to now nine months at tariffs of Rs 2.75 in line with unit or less. These tasks are within the early segment of implementation and not likely to have purchased sun modules, orders for that are in most cases placed 9-12 months after bids are gained.
“Solar modules account for 55-60% of the project cost of a sun plant, which is in most cases Rs 5 crore in line with MW. Today, over 90% of them are imported. Our research presentations that for each 10% drop within the rupee (value), the price of setting up a solar energy plant increases through Rs 30 lakh in line with MW, assuming other elements remain unchanged,” CRISIL senior director Subodh Rai said.
According to him, any other issue touching on the rupee’s fall weighing on the developers is the that in most cases they do not hedge the trade charge earlier than placing orders for modules.
The rupee has depreciated 12% this 12 months and had touched just about Rs 73 in opposition to the Greenback, making it the worst appearing currency in Asia.
The file said whilst bidding at low tariffs, what used to be expected and labored for the developers used to be a drop in module prices. The module prices have fallen through 17% for those tasks from 30 cents in line with watt at the time of bidding to 25 cents at this time, giving a benefit of just about Rs 34 lakh in line with MW. “But the mathematics didn't countenance a pointy depreciation within the rupee to greater than Rs 73 in line with buck, which has wiped off the positive factors from lower module prices. That, in flip, will compress the debt servicing cushion to be had for those tasks,” the file said.
The file said any other chance for long term tasks is the levy of 15-25% safeguard duty on imported sun modules for two years since July 30. The decision to put into effect the duty is determined by the verdict of the Odisha top courtroom, which is hearing a petition through developers.
“If the rupee stays susceptible and safeguard duty may be levied, project prices would dart up through as much as 20%. In any such scenario, a viable tariff for long term tasks should be upper through 30 paise in line with unit,” CRISIL director Manish Gupta said. “This would have an effect on the federal government’s target of setting up 100 GW sun capacity through 2022 because DISCOMS would baulk at purchasing renewable energy at upper tariffs.”
Moreover, lenders may also flip wary on financing tasks at a tariff of not up to Rs 3 in line with unit due to their slim debt provider parameters. However, financially sturdy developers may be able to organize the chance to some degree through prudently funding tasks with lower exterior debt element and bringing efficiencies within the operation and upkeep cost in line with MW as a result of scale and ability to negotiate with vendors.
According to the file, the tasks dealing with viability dangers include the 5.5 GW (gigawatt) capacity bid out up to now nine months at tariffs of Rs 2.75 in line with unit or less. These tasks are within the early segment of implementation and not likely to have purchased sun modules, orders for that are in most cases placed 9-12 months after bids are gained.
“Solar modules account for 55-60% of the project cost of a sun plant, which is in most cases Rs 5 crore in line with MW. Today, over 90% of them are imported. Our research presentations that for each 10% drop within the rupee (value), the price of setting up a solar energy plant increases through Rs 30 lakh in line with MW, assuming other elements remain unchanged,” CRISIL senior director Subodh Rai said.
According to him, any other issue touching on the rupee’s fall weighing on the developers is the that in most cases they do not hedge the trade charge earlier than placing orders for modules.
The rupee has depreciated 12% this 12 months and had touched just about Rs 73 in opposition to the Greenback, making it the worst appearing currency in Asia.
The file said whilst bidding at low tariffs, what used to be expected and labored for the developers used to be a drop in module prices. The module prices have fallen through 17% for those tasks from 30 cents in line with watt at the time of bidding to 25 cents at this time, giving a benefit of just about Rs 34 lakh in line with MW. “But the mathematics didn't countenance a pointy depreciation within the rupee to greater than Rs 73 in line with buck, which has wiped off the positive factors from lower module prices. That, in flip, will compress the debt servicing cushion to be had for those tasks,” the file said.
The file said any other chance for long term tasks is the levy of 15-25% safeguard duty on imported sun modules for two years since July 30. The decision to put into effect the duty is determined by the verdict of the Odisha top courtroom, which is hearing a petition through developers.
“If the rupee stays susceptible and safeguard duty may be levied, project prices would dart up through as much as 20%. In any such scenario, a viable tariff for long term tasks should be upper through 30 paise in line with unit,” CRISIL director Manish Gupta said. “This would have an effect on the federal government’s target of setting up 100 GW sun capacity through 2022 because DISCOMS would baulk at purchasing renewable energy at upper tariffs.”
Moreover, lenders may also flip wary on financing tasks at a tariff of not up to Rs 3 in line with unit due to their slim debt provider parameters. However, financially sturdy developers may be able to organize the chance to some degree through prudently funding tasks with lower exterior debt element and bringing efficiencies within the operation and upkeep cost in line with MW as a result of scale and ability to negotiate with vendors.
Re slide, safeguard duty cloud Rs 14k cr solar projects viability
![Re slide, safeguard duty cloud Rs 14k cr solar projects viability]()
Reviewed by Kailash
on
October 29, 2018
Rating:
