India delays national solar bid deadline for second time

MUMBAI -- India delayed the deadline for companies to submit bids in its next national solar auction for a second time after developers raised concerns about the ability of cash-strapped state utilities to pay for power.

The deadline has been pushed back by almost a month to Jan. 20, state-run Solar Energy Corp. of India, which will conduct the auction of 750 megawatts of capacity, said on its website. Earlier, it delayed the deadline from Nov. 29 to Dec. 28.

The auction will be the first since 2011 by India’s National Solar Mission and offer 18.75 billion rupees ($300 million) in grants to cover as much as 30 percent of project costs. Developers will submit bids specifying the funds they’re seeking, and the lowest bidders will win.

While Solar Energy Corp., which will buy power from the projects, has promised companies they will get paid, some developers are worried, according to Bridge to India Energy Pvt. “Solar Energy Corp. itself does not have the funds to pay them unless it sells the power either to state-run distribution utilities or other buyers,” said Jasmeet Khurana, head of market intelligence at the New Delhi-based solar advisory.

The government revised the payout period of grants from 12 months to five years since the auction was first announced last May, raising financing costs and reducing returns, said Vineet Mittal, managing director of Welspun Energy Ltd., India’s largest photovoltaic developer.

“The way it is structured has raised a fair bit of concern,” he said today by phone.

The auction is unlikely to attract as many bids as previous ones, and Welspun still hasn’t decided if it will participate, Mittal said. India’s first solar auction in 2010 received three times the proposed capacity offered.

Copyright 2014 Bloomberg

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