SolarQuarter September Issue 2020

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POLICY TALKS

ARE MNRE'S NEW BENCHMARK RATES FOR ROOFTOP SOLAR SYSTEM IN SYNC WITH INDUSTRY TRENDS? The Ministry of New and Renewable Energy (MNRE) has published benchmark costs for grid-connected rooftop solar projects for the financial year 2020-21. The benchmark costs will be applicable for all letters of award (LoAs) to be issued or for the vendors to be empaneled after July 31, 2020. The benchmark costs are inclusive of the total project costs, which include solar modules, inverters, the balance of systems, cost of civil works, installation, commissioning, transportation, and comprehensive maintenance for five years. The benchmark costs do not include net metering costs and battery back-up costs. Let's see what our industry experts have to say on the MNRE's Benchmark Rates for Rooftop Solar Systems

K.R. HARINARAYAN Founder and CEO,

which come at a range of costs such as bui lt - i n opt i mi zers, module level monitoring or micro-inverters wi t h bot h.

U-Solar Clean Energy

The MNRE benchmark costs are far t oo low si nce t hey are i nclusi ve of taxes and five years operations & mai nt enance. Thi s i s a bi t of an unhealthy practice by MNRE as the benchmark cost s should have sufficient buffers for various inclusions of condi t i ons t hat arri ve from different buildings or sites. For instance, t here are di fferent conditions that are present in each st ruct ure as t hese are uni que t o the facility which will give rise to cust omi zed bi lls of mat eri als. Therefore, the benchmark costs must account for t hi s fact or wi t h respect to distributed rooftop power plant s. In addi t i on, t here are various technologies that can be implement ed

| SEPTEMBER ISSUE 2020

By fixing a “benchmark cost� the market has an unreali st i c expectation of prices while disregardi ng t hat solar plant s can also be customized to energy requirement s and t echnology capabi li t i es. When they are marked very low, and each year i t i s reduced furt her, the MNRE is creating an eco-system for low quali t y i nst allat i ons as clients often are misguided by the benchmark pri ce (especi ally one that is all inclusive). The same is seen i n government t enders wherein the starting bids are not meet i ng t he i ndust ry value. When people are interested in lower price di scovery t here are ways of doing it through bidding and estimati on, however when set t i ng a pre-existing benchmark cost can lead t o poor-quali t y result s.

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