The COVID-19 crisis has crippled the world economy and brought it to a standstill. It has struck us at a time when our country’s solar project execution was at its peak. We are aware that India has ambitious targets of achieving 100 GW of solar energy by 2022 under the Jawaharlal Nehru National Solar Mission. As of January 2020, the country has installed approximately 35 GW of solar energy projects. However, the immediate future is expected to see a rise in solar projects nationally – in fact, the period right after the pandemic is an opportune moment for industries across all sectors to adopt solar energy to reduce costs. As we already know, the need for solar power encompasses all industries. Not only does it contribute heavily to the power sector, but also to the health, power and agriculture sectors as well. Its role in sustainable development, job creation, reducing emissions and fostering innovations in technology cannot be undermined.
Post the COVID-19 outbreak, a majority of manufacturing companies, complying with the norms of social distancing, is expected to operate with a reduced workforce, forcing them to move more and more towards automation. This will obviously lead to a higher demand for electricity. For companies with adequate fund reserves, there cannot be a better option than investing in solar energy to cater to this demand. Not only will it provide a cheaper option, in the long run, there will also be the much-needed environmental benefit. Using renewable energy will imply these businesses will be moving away from their dependency on fossil fuels and adopting cleaner methods of functioning in their new approach of work – thereby providing a win-win situation.
Alternatively, solar energy will also benefit cash-strapped companies. These too can save electricity and benefit immensely. If their credit ratings are reasonable, these companies can adopt solar by signing a Power Purchase Agreement (PPA) of solar energy. For the uninitiated, this model entails a financial agreement wherein a developer arranges for the design, permitting, financing and installation of a solar energy system on a customer’s property. The electricity generated by the system is bought at a fixed amount.
The solar industry is also going to continue benefitting from the low cost of debt resulting in lower financing costs. Loans for solar are readily available at lower interest rates than usual, as it comes under priority sector lending. This will make it further viable for companies to consider going solar. As solar has evolved from a fringe infrastructure asset class to a mainstream option for public and private sector banks in the country, domestic financing will see a shift beyond the plain vanilla debt and equity instruments. Non-recourse funding, bonds and mezzanine financing will emerge as the mainstays for the industry. As a consequence, Indian utility-scale solar projects will be easier to be financed.
Always at your service
Nimbus Solar Solutions, as a reputed renewable energy company, understands the needs of all businesses, whether big or small. The company has made significant contributions in sync with the Solar Revolution in our country. It continues to supply a wide array of solar solutions that have been tailor-made for all industries. The company also boasts of a team of experienced engineers and technicians to install, maintain as well as provide necessary education about all the solar projects. Even after the pandemic, the company is focused on accelerating the process of driving India towards becoming a global leader in solar energy. Its strong financial relationships and in-depth knowledge of tax implications will facilitate every business to receive maximum return from their investment in solar power. For more details, visit www.nimbussolar.in