SECI Opens Up Bidding For Rs 19,500 Crore Solar PLI

It’s finally here. The Solar Energy Corporation of India (SECI) has invited bids for the much awaited Solar PLI (performance Linked Incentive) tender that is expected to give a huge boost to the solar sector in terms of manufacturing prowess and backward integration domestically. The tender, under tranche II of the PLI program has a last date of January 9, with bids due to be opened on January 12.

With the thrust on ensuring a complete domestic supply chain, the tender document has the following ‘baskets’ for bidders to consider.

• Polysilicon + ingots-wafers + solar cells + modules
• Ingots-wafers + solar cells + modules
• solar cells + modules

• Each awarded bidder will have to pay the performance bank guarantee as per the following written details:

  

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Basket	Extent of Integration	Rs. Crore/GW of Manufacturing Capacity	Validity of PBG
1	P+W+C+M	13	9 years from LoA
2	W+C+M	9	8 years from LoA
3	C+M	6	7.5 years from LoA

A Bidder, including its Parent, Affiliate or Ultimate Parent or any Group Company shall submit a single bid undertaking to set up a Manufacturing facility of a minimum 1,000 MW capacity (1,000 MW each for all individual stages included in the SMM’s proposal).

The minimum annual turnover for the last three financial years, the requirement for prospective bidders to participate in the bidding process at least shall be calculated as follows:

4.0 Cr. X Capacity in MW bidder is bidding X 0.7 = X Cr. 

The Net Worth of the bidder, as of the last date of the previous financial year, i.e. FY 2021-22 or as of the day at least 7 days before the bid submission deadline, should be equal to or greater than the values as given in the table below:

Basket	Extent of Integration	Net-worth (Rs. Cr./GW)
1	P+W+C+M	380
2	W+C+M	260
3	C+M	180

Bidders can view/download this Solar Energy Corporation of India Limited (SECI) 10 GW solar module manufacturing plant tender documents and technical specifications here.

Readers will recall that after Tranche 1 of the PLI tender that was for Rs 4500 crores, many firms that did not make it to the final winners list nevertheless went ahead with their manufacturing plans, notably Waaree Energies, Tata Power, Goldi Solar etc. Some of those capacities coming up will still be eligible for the tranche 2 tender, even as massive starts have been made by Reliance New Energy. Even PSU giants like Coal India Limited are expected to be a serious player in the tranche 2 bids, with their strong interest in manufacturing now On present trends, the India’s manufacturing capacity for cells and modules is expected to cross 40-50 GW by 2025, from an existing base of 10 GW plus.

The request for selection (RfS) document specifies that bidders must set up either Greenfield or Brownfield manufacturing facilities for the quoted capacity, with PLI receivable for a brownfield manufacturing plant at 50% of what would be available for a greenfield facility.

Winning bidders are decided on a scoring system, with the government pushing to increase the CUF to ensure only high performance and quality manufacturing gets the nod.

For basket one, which will require the highest capital commitment, the manufacturing facility should be commissioned within three years from the date of the issuance of the letter of award. For baskets two and three, the commissioning dates are set at two years and 18 months, respectively. Previous winners are also eligible to participate in the second tranche, making Reliance New Energy, the largest winner previously, a very strong contender yet again. This time the Adani Group is also expected to pitch in much more aggressively, after it’s multiple expansions across the solar supply chain, announced and under execution.

Of the Rs 19,500 crore provision for incentives, Rs 12000 crores is for basket one, Rs 4500 crores for basket two, and Rs 3000 crore for basket three. Demands from smaller players for some sort of category for them to bid seem to have been ignored, especially in basket 3, leading most industry players to increasingly hold the view that any module maker with a capacity under 1 GW might face a survival challenge in due course. Minimum capacity per bid has been set at 1 GW, with the maximum at 10 GW for basket 1, which is likely to have the least number of players.

Readers will recall that in the tranche 1 bids, Reliance New Energy had won the highest allocation, even as one of the three winners, Jindal  Solar Energy, giving up its allocation citing changed market conditions. Shirdi Sai Electricals was the other winner.