With global drop in photovoltaic (PV) technology prices, the Asian Development Bank (ADB) has sounded off that it is now reviewing options to lend to solar projects even without the support of feed-in-tariffs.
ADB energy specialist Sohail Hasnie said they have initially penciled in $100-million credit facility which may be availed of by interested solar power developers.
He added that discussions within the bank’s renewable energy group are currently centered on supporting solar development program without subsidies or FIT.
The ADB official intimated though that there would be “fierce competition” on capital access for clean energy projects, including those on renewable energy (RE) developments.
The bank has its own solar rooftop-installed power source as a showcase project aptly demonstrating that the technology can already be utilized viably without subsidies.
As the Energy Regulatory Commission (ERC) prepares a ruling on the FITs for various renewable energy developments, regulators are firmly cautioned on subsidy impositions for solar especially with reports that the technology is already at grid parity in various jurisdictions.
In fact, sources from the National Renewable Energy Board’s (NREB) technical working group have tipped off that when the initial high FIT was calculated for solar, the prospective developers have not presented as much data to support their proposed numbers.
On ADB’s part, it noted that it is willing to extend technical assistance to the Department of Energy (DoE) so a study can be undertaken to assess the viability of solar installations in the country, primarily on rooftop solar which may be aligned as power supply option for industries and businesses.
The bank has opined that rooftop-installed solar facilities can now be economically feasible for higher-demand customers even without subsidies. However, bringing them down to the level of residential end-users might still be expensive.
The bank’s Asia Solar Energy Initiative (ASEI) is targeting solar capacity installations of up to 3,000 megawatts within Asia and the Pacific over three years that will wind up in 2013.
The ADB is eyeing to finance up to $2.25 billion worth of projects under its ASEI program and shall also leverage an additional $6.75 billion in solar investments in the same period.
The ADB said it will be using instruments such as London interbank offered rate (LIBOR)-based loans, donor contributions, grant funds, innovative risk mitigation mechanisms, carbon market support measures and direct support for its solar lending program.
