According to Crisil, the ongoing solar projects are prone to face penalties due to its delay. It is a 3GW solar project worth Rs 16,000 crore that is missing its scheduled commercial operation date (SCOD). All this is due to the outburst of coronavirus in China because nearly 80 percent of solar modules got imported from China. This outburst has adversely affected trade, and hence this project is lagging.

The delays in the project would lead to penalties, including renegotiation of tariffs as per standards of PPAs. This outbreak has affected every manufacturer as they have to run their plants at low resources or work together to reach targets. All this has restricted the accomplishment of the project.

The 3GW solar project auctioned between July and August 2018 and with a deadline by July 2020 is at high risk due to this clampdown. 

Crisil’s Senior Director Manish Gupta said that modules order for modules had been placed six months before SCOD, and delay at this stage would lead to the massive loss. The solution to this situation is to import modules from other locations. It is costly to developers but necessary to reach the timelines.

The modules may cost 15-20% higher and thus abrade on returns. But in this context, developers can appeal for the ‘force majeure’ clause in PPA under which they can pursue relief from unforeseen and uncontrollable events. But after all this, it may face legal and regulatory hurdles.