The momentum of the government's solar park is rushing to the challenges of land acquisition and transmission


Big targets make people talk. This is exactly what happened in June 2015, when the government of Narendra Modi quintupled the solar energy target. In March 2022, the government said that India would have 1,00,000 MW of solar capacity.

With this, the country put a great bet on a future in which clean energy would play a crucial role. While some call this positive thinking, others say that the target is not unrealistic.

A few years later, the government raised yet another goal: installed capacity in solar parks. The government said there will be a capacity of 40,000 MW in solar farms by March 2022, double the previous target.

These two goals mean that solar parks alone would contribute to 40 percent of India's installed solar capacity in three years. But given the slow progress in setting up solar parks – due to problems of land acquisition and challenges in evacuating the energy generated in these parks – this seems highly unlikely. The same happens with the target of 1.00.000 MW until March 2022.

The solar industry has lost some of its momentum in recent months. This is worrying as solar power is crucial for the government's plan to double the share of renewable energy in India's installed electricity generation capacity to 40% by 2030.

The target is part of India's commitments under the Paris Agreement of 2015 on climate change, which also includes cutting emissions to GDP by one third by 2030 from 2005 levels.

Inspired by the success of the 59,000-MW Charanka solar park in the state of Gujarat in Modi, the government of the Union issued a plan in December 2014 under the Jawaharlal Nehru National Solar Mission to install 20 solar parks, each with a capacity of at least 500 MW throughout the country until March 2019.

That meant an installed capacity of 20,000 MW in these parks. (India's installed solar capacity is around 28,180 MW, 8% of the total, thermal energy accounts for 64%.) With a body of Rs 4,050 crore for the scheme, the government promised park developers Rs 25 lakh per park to conduct research and prepare project reports, and Rs 20 lakh per MW or 30% of the project cost, whichever is less.

In March 2017, the government decided to be even more ambitious and announced the creation of 50 solar parks with a capacity of 40,000 MW by March 2020. The deadline was extended for another two years. Government financial assistance also doubled to Rs 8,100 crore.

What is the status of solar parks now?

So far, the government has approved 42 solar parks with a capacity of 23,449 MW. Some of the parks have a proposed capacity of less than 500 MW.

According to a senior official at the Ministry of New and Renewable Energy (MNRE), only 5,835 MW were commissioned in a handful of parks. To meet the 40,000 MW by March 2022, capacity will have to increase almost sevenfold.


Does this mean the target will be shortened or the deadline extended? The MNRE official does not think so. "Another 14,000 MW will be sanctioned under the new solar park policy," he says, seeking anonymity because he is not authorized to speak to the media.

The idea behind the solar parks is that the entrepreneur – a government agency or a joint venture between a state agency and a private participant – will provide the land needed for energy producers, as well as provide other infrastructures.

As each MW of solar energy requires about five acres, creating large projects means buying huge expanses of contiguous land, which is not easy for most businesses.

Nikhil Dhingra, chief executive of Acme Solar Holdings, says that solar parks increase competition, cut rates and attract new entrants. But parks are a good strategy only when there is early control over land titling and evacuation infrastructure, he says. "This is not being done in real time along with the development of plants. This will make the solar park unprofitable and the commissioning schedule will not be met, defeating the capacity targets. "

Acme has about 1,000 MW of operating capacity in four solar farms, including the two largest operating parks – the 2,255 MW solar park in Bhadla, Rajasthan, and the 2,000 MW park in Pavagada, Karnataka.

Solar parks

The company's 205 MW project at the Ananthapuramu solar park in Andhra Pradesh was postponed last year due to a lack of evacuation infrastructure preparation and problems with the transfer of title deeds. "We had to bear interest costs for the commissioning period scheduled for actual commissioning."

Hero Future Energies should have about 1,500 acres for its 300 MW power plant in Bhadla, about 200 km northwest of Jodhpur in June 2018. But it landed in January 2019, and yet not everything. The commissioning of the project was driven from April to August 2019.

Sunil Jain

"There are many changes in the form and size of the land they show at the time of bidding and the terrain you actually receive, and invariably your costs go up." Sunil Jain, CEO, Hero Future Energies

"There are many changes in the form and size of the land they show at the time of bidding and the land you actually receive, and invariably their costs go up," says Sunil Jain, CEO of Hero Future Energies. An autonomous project also faces the challenge of land acquisition, he adds, but a solar energy producer may choose to set up a factory outside a park for faster execution.

However, Sumant Sinha, CEO of ReNew Power, the country's largest renewable energy company, says a solar park simplifies the execution of a solar project. "The biggest problem is the aggregation of land." A quarter of ReNew's 1,500 MW of solar capacity is in solar farms, including in Pavagada, where it has 350 MW.

Pavagada Park, about 160 km north of Bengaluru, is spread over 13,000 acres rented from farmers. Earlier this year, there were reports that some of the land leased for the project were mortgaged with a bank by its owners. The Pavagada park has an operating capacity of 1,400 MW, out of the 2,000 MW proposed. "The government should give us just transmission infrastructure in solar parks, we will acquire the land," says Jayant Parimal, CEO of Adani Green Energy, which has 150 MW in Pavagada.


Some solar parks have lately been criticized for lack of facilities such as fences and site security. "The quality of some facilities in the solar park is quite poor. They do not even level the earth, "says Vinay Rustagi, managing director of Bridge to India, a renewable energy consultancy.


The MNRE in March said India's Solar Energy Corporation (SECI) will develop the external energy transmission infrastructure and will also make land available for solar parks for a fee. But left the development of the internal system of evacuation, fencing, roads and land leveling for energy companies. These costs could be considered in the tariff, which will now increase. JN Swain, SECI's managing director, did not respond to requests for comments.

Another problem that plagues the solar parks are the charges they charge. The head of a solar energy company, on condition of anonymity, says they are disproportionately high in relation to the government's expectations on tariffs. Solar farms charge an initial fee of Rs 40-60 lakh per MW and an annual operation and maintenance fee of Rs 1-2 lakh per MW. In an autonomous project, these costs can be at least 30% smaller.

Park fees are also linked to another worrying trend that has been affecting the solar energy industry as a whole.

In January, the Gujarat government canceled a 700 MW auction in the Radhnesada solar park, as tariffs were not as low as the government expected.

Solar energy

Bidders cited the park's high rates as the reason behind the rates they quoted. In March, when the government of Gujarat called for bids of 1,000 MW in the Dholera solar park, there were no buyers, since the tariff was limited to R $ 2.75 per unit. The Dholera park, with a planned capacity of 5,000 MW, is the largest proposed solar park in India.

According to Bridge to India, around 5,300 MW of solar biddings were canceled only in 2018. Since Acme won Bhadla's offer at Rs 2.44 per unit, the lowest of all in May 2017, central and state government agencies expect low rates on other projects as well. The imposition of the import tax on solar cells from China and Malaysia also cushioned the sector's spirits. The addition of capacity in 2018 was 8,263 MW, 15% lower than in 2017, says Mercom India's clean energy consultancy.

Solar Plans

The caution that the companies have about the creation of projects in solar parks extends to the development of the own infrastructure of the solar park. Between 2014 and 2017, a state government could develop a park through a joint venture with a private company on a first-come-first-served basis. But since 2017, even the infrastructure of the solar park had to be tendered.

In 2015, Adani Enterprises signed an agreement with the government of Rajasthan to create a 10,000 MW solar park. But it is now only developing 2,000 MW, with 500 MW in Bhadla and the remainder in Fatehgarh, in the Jaisalmer district. The remaining capacity will have to be tendered according to the new rules.

Despite concerns over solar parks, ReNew's Sinha points out, both solar parks and independent projects are needed to expand India's solar capacity. "Of course there has to be a deeper due diligence in the acquisition of land. And farmers' legal ownership issues need to be dealt with proactively, "says Manoj Kohli, chief executive of SB Energy, a SoftBank Group company.

Even if solar parks become a compelling option for developers, this may not happen fast enough to reach the 2022 target.


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