The rate of finance for Solar Projects in India lies between 13-14 per cent, whereas Germany and China have kept it as low as 5-6 per cent and 3-4 per
cent respectively.
This difference puts pressure on the solar energy industry resulting in
increase in the price of indigenously manufactured solar equipment or
per unit cost of solar power generation. Given the challenges confronted by the solar industry due to scarcity of funds, FICCI solar energy
task force has asked the government to make available low cost capital
to provide a competitive edge to the Indian solar value chain.
As per an estimate given by FICCI solar task force -- representing the entire value chain of the solar industry -- the difference between the lending rates of Indian banks and that of foreign lenders is around 10%. The rate of finance for Solar Projects
in India lies between 13-14 per cent, whereas Germany and China have
kept it as low as 5-6 per cent and 3-4 per
cent respectively.
Higher cost of debt financing for solar project development or
manufacturing has been a deterrent in its growth and makes them
vulnerable to foreign lenders' terms and conditions. 'Debt from the
foreign financial institutions comes with riders that force project
developers to accede to their terms and conditions," FICCI said.
Source: Economic Times
