Madhya Pradesh issues an innovative rooftop solar tender

12 July 2018 |

Madhya Pradesh Urja Vikas Nigam Limited (MPUVNL), in partnership with the World Bank, has issued a 28 MW rooftop solar tender under the OPEX model. The tender has been re-issued but the capacity has been revised down from 40 MW earlier after conducting site surveys. The proposed capacity is expected to be deployed across a range of buildings belonging to state government educational institutions (55%), central government institutions (18%), other state government institutions (15%) and private institutions (12%).

The selected bidders are required to design, install, finance, own and operate the systems for 25 years. In addition to 30%/ 25% capital subsidy provided by central government for private institutions and government buildings respectively, the state government is offering an additional subsidy of 20%.

Learning lessons from recent SECI and other government rooftop solar tenders, this tender contains many developer friendly provisions introduced for the first time in India:

  • Identified capacities have been validated in advance using satellite imagery and site surveys;
  • A virtual ‘data room’ with technical assessment data of the site along with electricity consumption history is provided to bidders;
  • Part-commissioning of projects is allowed;
  • PPAs have been vetted and approved by the consumers in advance;
  • Performance monitoring benchmarks have been indexed seasonally to account for variation in performance;
  • Capacity has been divided into 22 project groups by type of end-consumer such as central and state government buildings, municipal buildings and others. This has been done to enable developers to bid for uniform credit profiles and secure easier financing.

Validation of capacity has been carried out to avoid post bidding mismatch. This mismatch led to SECI’s 1,000 MW rooftop tender in December 2016 being scaled down to 500 MW and further reduction in allocated capacity to 226 MW.

Investor interest in rooftop solar tenders has been waning due to multiple execution challenges faced by developers. But we understand that many developers are interested in participating in this tender as it addresses many of the issues faced in previous rooftop solar tenders issued by government agencies. If this tender is successful, it may provide a template for future rooftop solar tenders in the country.

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