India extends bid deadline for latest attempt to attract solar manufacturers

The Solar Energy Corporation of India’s (SECI) new solar manufacturing-linked power generation tender has hit another roadblock – the bid submission deadline has been pushed back more than two weeks.

The deadline for the procurement – for 3 GW of PV generation capacity linked to 1.5 GW of annual solar manufacturing capacity – was originally set for yesterday but has now been extended until April 4.

The tender was issued in January and encountered stumbling blocks even before bids were received. A first amendment was made last month, a pre-bid meeting was postponed and earlier this month, SECI amended the Request for Selection (RfS) document again, to include a change in law.

According to the RfS amendment: “Change in law will include any change in the rates of any taxes including any duties and cess [levy] or introduction of any new tax made applicable for setting up the solar PV power project and supply of power from the solar PV power project by the solar project developer, which have a direct effect on the solar PV project.”

Second attempt

The 3 GW tender is a watered down version of SECI’s previous ‘world’s largest’ 10 GW procurement, that featured a mandatory 5 GW manufacturing clause. That was the nation’s first solar tender where developers were required to locally produce equipment to secure projects. The 10 GW tender received a tepid response from developers and, after six postponements, received only one bid. Azure Power bid for 2 GW of generation capacity and 600 MW of manufacturing output but even that bid was cancelled by the government, which cited dissatisfaction with the quoted tariff.

Industry watchers are attributing the lukewarm response to the manufacturing-linked tenders with doubts about the viability of domestic manufacturing that include a dearth of incentives and volume uncertainty coupled with high interest and capital costs.