The report, issued by Bridge to India, states that 1,637.5 megawatts (MW) worth of PPAs have been signed in India this year: this is up from "a paltry" 24 MW in 2010. Of these 1,637.5 MW, 620 MW fall under the National Solar Mission (NSM), 84 MW under the Migration Scheme and 933.5 MW under the Gujarat policy.
The desert state of Rajasthan has also been identified as a "new riser". The report explains that it currently has a draft solar policy, which aims to install between 10,000 and 12,000 MW of solar over the next ten years.
It says that the first phase will comprise 200 MW, while the second will see 400 MW installed. A tariff based on competitive bidding will be used.
In terms of the PPAs signed, Rajasthan has 11 projects worth 66 MW under the NSM migration scheme, 26 projects worth 505 MW under the NSMs first phase and two five MW photovoltaic plants by Par Solar and Reliance Industries under the old Generation Based Incentive scheme (GBI) by the Ministry of New and Renewable Energy.
While there is enormous potential to install solar in India, the authors of the April edition of the Indian Solar Compass state that bankability is an issue for the majority of the projects with signed PPAs.
"Project developers are finding it difficult to attain financial closure for projects under the NSM as well as the Gujarat Solar Policy. Especially difficult is obtaining non-recourse debt financing," states the report.
It adds that project financing is difficult due to the perceived level of risk by lenders. The report continues: "With a lack of reliable irradiation data, it is difficult to calculate the generated output and therefore, the return on investment. There are so far only a few projects in the country that provide actual generation data as a reference.
"In addition, the majority of developers are new entrants with no track-record to prove their ability to build and operate solar power plants. Indian commercial banks are unsure about the generation capacities of power plants and hesitant to extend debt to projects."
This ties in with the beliefs of the Asian Development Bank, which states that there is a lack of affordable long-term finance from banks. It announced yesterday that it will provide up to $150 million in credit guarantees to support the development of the Indian solar industry. It is also making $1.25 million available for solar training.