Upward Trend: Overview of the solar EPC market in India

India, with its abundant solar energy resources, has become a hotbed for so­lar energy adoption. The nation’s com­mitment to clean and renewable energy is exemplified by the significant role played by engineering, procurement and construction (EPC) companies in the solar sector. The solar EPC market in India has wit­nessed exponential growth in recent years, fuelled by the government’s ambitious renewable energy targets and fav­ourable policies.

EPC companies in India work closely with project developers, government agencies and other stakeholders to design and execute solar power projects of varying scales. They are responsible for conducting feasibility studies, identifying suitable locations, obtaining the necessary permits and se­cu­ring financing. Once the project is greenlit, the EPC firms will procure solar panels, inverters, mounting structures and oth­er essential components to ensure seamless execution. The solar EPC process involves careful engineering to optimise energy output and ensure the longevity of the solar po­wer plant. It requires meticulous planning and expertise in integrating the latest solar te­ch­nologies, such as bifacial solar panels, tracking systems, and en­ergy storage sol­u­tions. In this article, Re­newable Wat­ch pro­vides an overview of the solar EPC market in India and the recent auctions in this space…

Recent solar EPC auctions

India’s clean energy sector has experien­ced substantial growth, with numerous so­lar EPC projects being awarded in the past six months. Several companies have succ­essfully secured contracts for grid-conn­e­cted solar ventures across different states.

Svaryu Energy Limited secured an EPC contract from Coal India Navikarniya Urja for a 25 MW grid-connected solar project in Purulia, West Bengal. It won the pro­ject for Rs 1.63 billion in an auction conducted in July 2023. In another EPC auction by Coal India in June 2023, Shreeji Infra­str­ucture India Private Limited was awarded 35 MW of solar projects along with associated tra­ns­mission systems in West Bengal at a win­ning bid of Rs 2.08 billion. In July 2023, Gensol Engineering Limited secured an EPC contract from the Damodar Valley Corporation for an 8 MW ground-mounted solar power project in Jharkhand. The co­m­pany quoted an amount of Rs 476 million in the e-reverse auction.

In the past six months, two floating solar EPC auctions were conducted. In July 2023, Ilios Power won an EPC and operations and maintenance (O&M) contract for 6.9 MW of floating solar power projects in Kerala. Their total contract price, in­cluding GST, amounted to Rs 554 million, with a quoted EPC price of Rs 486 million. Har­tek Solar won the second floa­ting solar project during the same period, securing an EPC contract from SJVN Gr­een Energy Limited for a 15 MW floating solar power project in Himachal Pradesh. Meanwhile, Tata Power Solar Systems Li­mited secu­red an EPC contract for a 300 MW do­mestic content requirement-based solar project in Rajas­than at an investment of Rs 17.5 billion.

Naviya Technologies Renewables Private Limited secured a 2 MW grid-connected canal-top solar project in Ranchi in the auction conducted by the Jharkhand Renewable Energy Development Agency. It total quoted cost for EPC works, the O&M contract, and net electrical energy generation guarantee for 10 years was Rs 201.92 million.

Goldi Solar Private Limited secured an EPC contract for an 8 MW ground-mounted solar PV plant in Madhya Pradesh, with a total project cost of Rs 450.85 million for the entire scope of work.

During the past six months, Tata Power Solar Systems secured the highest cap­acity project (300 MW in Rajasthan), while Naviya Technologies Renewables won the smallest capacity project (2 MW canal-top in Ranchi). In terms of per MW price, Goldi Solar quoted the lowest at Rs 56.35 million for its 8 MW ground-mounted project in Madhya Pradesh, while Naviya Techno­logies quoted the highest at Rs 76.63 million per MW for its 2 MW solar project in Jharkhand. Interestingly, the ground-mo­unted solar project commands the highest per MW price, rather than the floating solar project which tends to have higher EPC costs. This may be due to econo­mi­es of scale, as floating solar projects us­ually span approximately 7-15 MW, whi­le the 2 MW solar project exhibits the highest per MW cost.

Key factors for choosing the ideal solar EPC company

When selecting the ideal solar EPC company for efficient solar project implementation, several critical parameters should be considered.

  • Equipment expertise: It is crucial to evaluate the EPC company’s knowled­ge and expertise in solar equipment and comp­onents. Clients should enquire about the source of equipment, warranty detai­ls and the team’s technical understanding to ensure high quality solar installations.
  • Comprehensive solutions: The preferred solar EPC partner should offer end-to-end solutions, managing every aspect of the solar power plant’s implementation. From site analysis and de­si­gn to project management, procu­re­ment, installation and commissioning, a full-service EPC ensures hassle-free and efficient project execution.
  • Licensing and approvals: Obtaining the necessary licences and government ap­provals is a complex process. An id­eal EPC company takes charge of na­vigating through paperwork and obtaining all required permits for a seamless PV system installation.
  • Operations and maintenance support: Po­­st-implementation support is critical for long-term solar power plant efficiency. Clients should ensure the chosen EPC company provides comprehensive O&M services to ensure optimal perfor­mance throughout the plant’s lifespan.
  • Credibility and experience: The credibility and experience of the solar EPC co­m­pany can significantly impact project success. Assessing the EPC’s track re­cor­d in various geographic terrains, project scales and years of industry ex­perience, along with vendor relations and past performance, is essential. Ad­ditionally, evaluating the technical and engineering skills of the team and their technology partnerships offers insights into the EPC firm’s capability to deliver exceptional results.

By considering these parameters, clients can confidently select the right solar EPC partner and embark on their journey towar­ds clean and sustainable solar energy.

Challenges in the EPC market

The solar EPC industry faces myriad challenges that test the resilience and in­ge­n­uity of companies operating within it. One such obstacle is the highly competitive mar­ket, where numerous players vie for projects, leading to intense bidding wa­rs. Aggressive bidding can often result in narrow profit margins, leaving EPC companies with little room to cover unexpected co­sts or invest in research and development. Moreover, the pressure to offer competitive prices can lead to compromises on quality. Some EPC companies might cut corners to reduce costs, jeopardising the long-term performance and reliability of solar power plants. Ensuring high quality components and installations becomes a critical balancing act in the pursuit of affordability and efficiency.

Low profit margins also curtail the capacity of EPC firms to invest in workforce trai­ning and skill development. The rapid ex­pan­sion of the solar sector necessitates a skilled workforce capable of handling so­p­histicated technologies and complex ins­tallations. However, low margins will hinder the ability to provide comprehensive training and retain experienced employees.

Addressing these challenges requires a delicate equilibrium between competitiveness and sustainability. As the solar EPC industry evolves, finding innovative solutions to enhance quality, optimise costs and foster skill development will be crucial in overcoming hurdles and paving the way for a brighter and greener future.

The way forward

The solar EPC industry in India has experienced remarkable growth, driven by technological advancements, decreasing costs, and government support. EPC com­panies play a crucial role in ensuring the accessibility of solar energy and contributing to the nation’s journey towards sustainable development. However, add­re­ssing challenges related to land acquisition, financing and skill development is essential to sustain and accelerate this growth trajectory. As India continues to em­brace solar energy, the solar EPC in­dustry will play a vital role in transforming the nation into a greener and more environmentally conscious powerhouse.

By Anusshka Duggal