Petition No. 242/SM//2012 (Suo-motu). Case: In Re: Determination of Benchmark Capital Cost Norm for Solar PV power projects and Solar Thermal power projects Vs. Central Electricity Regulatory Commission

Case Number:Petition No. 242/SM//2012 (Suo-motu)
Party Name:In Re: Determination of Benchmark Capital Cost Norm for Solar PV power projects and Solar Thermal power projects Vs
Judges:Pramod Deo, Chairperson, S. Jayaraman, V.S. Verma and Deena Dayalan, Members
Issue:Electricity Law
Judgement Date:February 28, 2013
Court:Central Electricity Regulatory Commission
 
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Order:

  1. The Commission notified the Central Electricity Regulatory Commission (Terms and Conditions for Tariff determination from Renewable Energy Sources) Regulations, 2012 (hereinafter "the RE Tariff Regulations") on February 6, 2012. The first proviso of the Regulation 5 of the RE Tariff Regulations provides that the Commission may annually review the benchmark capital cost norm for Solar PV and Solar thermal power projects. The Benchmark Capital Cost Norms as stipulated under Regulation 57(1) for Solar PV power project and under Regulation 61(1) for Solar thermal power project are applicable for solar power projects for the year FY 2012-13.

  2. In exercise of the power under Regulation 5 of RE Tariff Regulations, the Commission vide Order dated 25th October, 2012, proposed to determine the Benchmark Capital Cost Norm for Solar PV power projects and Solar thermal power projects for the year 2013-14 (Petition No. 242/SM/2012-Suo-Motu) and invited Comments/suggestions/objections from the stakeholders.

  3. In response, written comments/suggestions were received from the following stakeholders:

  4. Sun Edison Energy India Private Ltd.

  5. Renew Power Ventures Pvt. Ltd.

  6. Nano PV Solar Inc.

  7. Tata Power Company Ltd.

  8. Aditya Birla management Corporation Ltd.

  9. Juwi India Renewable Energies Pvt. Ltd.

  10. First Solar Power India Pvt. Ltd.

  11. Moser Baer Engineering and Construction Ltd.

  12. Association of Power Producers

  13. Subsequently, a public hearing was held on 8th January, 2013 and the following stakeholders made oral submissions:

  14. National Thermal Power Corporation

  15. Moser Baer

  16. The Commission has analysed the views/comments/suggestions of the stakeholders and the Commission's decisions given in the following paragraph.

    Solar PV Power Projects: Capital cost of Solar PV projects

    1. Module Price

  17. Comments:

    6.1 Average prices of various module categories available in India hover in the range of 0.68 $/Wp to 0.75 $/Wp. Most of industry experts opine that module prices, after continuous fall in recent years, have stagnated at the prevailing bottom level and it is highly likely that the prices would remain at the prevailing bottom level in near future. It has therefore been suggested that the module price should be considered as 0.70 $/Wp. (Renew Power Ventures Pvt. Ltd.)

    6.2 Trend of last 6 months shows that the drop in module price was not that steep anymore, rather it is stabilizing. It has been recommended that the base module cost should be fixed at 0.70$/Wp which works out to ` 371 Lakh/MW with exchange rate of ` 53/US$. (First Solar Power India Pvt. Ltd.)

    6.3 Module cost may be considered as 0.75$/Wp instead of $0.65/Wp as envisaged by CERC. (Association of Power Producers)

    6.4 Module cost should be considered at $0.70/Wp considering the trend of module cost which is expected to go up in 2013-14. (Moser Baer)

    6.5 There should be separate capital cost norms for large utility scale Solar PV Projects and Small rooftop systems. Considering $ 0.65/ Wp as cost without Insurance, Freight & Taxes, the landed cost should be taken as $ 0.75/Wp and the total capital cost should be revised upwards to ` 900 Lakhs/MW for a utility scale grid connected solar PV projects. The capital cost for small rooftop systems should be 20% higher @ ` 1100 lakhs/MW. (Tata Power)

    6.6 Cost of solar modules made in India should be used for the cost estimation of solar systems in India. The draft Order does not envision scenario when Chinese Panel in India are subjected to an anti dumping tax or import duty. (Nano PV Solar Inc.)

  18. Analysis and Decision

    7.1 Based on discussion with various stakeholders it is found that some of the following top ten solar PV manufacturers are currently selling their first tier crystalline modules in India at a price as low as $ 0.60/Wp.

    Source: Wikipedia

    7.2 Latest edition of the Mercom's market intelligence report on Solar also reveals that the prices of solar components continue to drop moderately. Report further states that even with demand from China, Japan and Germany, oversupply continues to pressure the solar component prices.

    Source Mercom Market Intelligence Report on Solar date 10.12.2012

    7.3 PVinsights report on solar module spot price (last updated on 23.1.2013) also reveals that silicon module prices are being traded in the range of 0.55 US$ to 1.00 US$ with an average of around 0.657 US$.

    7.4 The Table below shows the Solar PV module price trends in the year 2012 in European market.

    Source: Solar Market Intelligence Report, Mercom, January 21, 2013

    Source: Solar Market Intelligence...

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