NEW DELHI: Nearly half of the solar power capacities under implementation in the country, worth Rs 28,000 crore, face viability risk because of the continuous depreciation of rupee against dollar, says a report by ratings agency CRISIL.
According to the report, the rupee fall has made imported solar modules costlier and increased the cost of setting up solar plants.
What is under risk are 5.5 GW-capacity projects bid out in the past nine months at very low tariffs of Rs 2.75 per unit or less.
“Solar modules account for 55-60 per cent of the project cost of a solar plant, which is typically Rs 5 crore per MW,” said Subodh Rai, Senior Director, CRISIL.
“Today, over 90 per cent of them are imported. For every 10 per cent drop in rupee, the cost of setting up a solar power plant rises by Rs 30 lakh per MW, assuming other factors remain unchanged,” he said.
Developers typically do not hedge the exchange rate before placing orders for modules.
Rupee value has fallen about 12 per cent against the dollar this year and has wiped off gains of the fallen module prices.
Further, the imposition of safeguard duty on imported solar will pose another risk for future projects. In such as scenario, “project costs would dart up by as much as 20 per cent approximately,” said Manish Gupta, Director, CRISIL Ratings.