India will consider extending deadlines for completing solar energy projects to shield developers from stiff penalties after the coronavirus outbreak hit component supplies from China, a top government official said on Tuesday.
Ratings agency Standard and Poor’s Indian unit, Crisil, warned on Monday that nearly three gigawatts of solar power projects worth $2.24 billion could be at risk of penalties for missing a July 2020 completion deadline as the coronavirus hit solar industry supplies.
India buys about 80% of its solar modules from China, which has shut down some factories, restricted transport and implemented other measures to combat the spread of the virus that has killed 1,868 people in China and infected 72,436 others.
Some of the companies running up against the July 2020 deadline include Aditya Birla Renewables and SoftBank-backed SB Energy.
Acme Solar also has solar projects but said it did not face a July 2020 deadline.
Aditya Birla Renewables and SB Energy did not respond to emails on Tuesday asking if they would meet the project completion deadlines.
Indian rules impose monetary penalties for a three-month delay in commissioning of a project, while projects delayed further also face downward revisions in tariffs.
Tariffs at which a company will sell the power to customers are quoted when the developer bids for a project.
“We cannot predict when China will start production of solar modules and cells,” said C. Narasimhan, president of the Indian Solar Association. “The government should look at extending the deadline without renegotiating the tariff.”
Purchasing of solar modules from elsewhere would be between 15% and 20% more costly, and could erode returns from the affected projects, said Crisil, without identifying individual projects.
Narasimhan, who also heads Raasi Group, which is building a 100-megawatt solar power project at Tamil Nadu in southern India, said Raasi was also requesting an extension to avoid facing any penalties, including a downward revision in tariffs.