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