Solar Energy Gradings

To avail subsidy from the Ministry of New and Renewable Energy (MNRE), under the Jawaharlal Nehru National Solar Mission (JNNSM), channel partners need to obtain a grading from CRISIL (valid for two years from the date of report generation).

Solar Energy Grading Scale

A Solar Grading reflects our opinion on the performance capability and financial strength of the solar project (SP). The grading scale '1 - 5' indicates the performance capability and 'A - E' indicates the financial strength of the project.

 

For example, a project assigned a grading of 'SP 2A' would have high-performance capability and high financial strength. Conversely, a project with a grading of 'SP 4C' would display weak performance capability and low financial strength.

 

Our Solar Energy Grading scale is as follows:
 

                                                                   Financial Strength
  Highest High Moderate Weak Poor
Performance
Capability
Highest SP 1A SP 1B SP 1C SP 1D SP 1E
High SP 2A SP 2B SP 2C SP 2D SP 2E
Moderate SP 3A SP 3B SP 3C SP 3D SP 3E
Weak SP 4A SP 4B SP 4C SP 4D SP 4E
Poor SP 5A SP 5B SP 5C SP 5D SP 5E

Grading Process

The chart below illustrates the steps taken in grading a company: 

The grading process involves the following steps:

  • Channel partner approaches CRISIL for grading, submitting documents, mandate forms and cheque (payable in Mumbai) drawn in favour of CRISIL Ltd (format for the mandate form, and list of documents are available on request)
  • On receipt of all documents, as detailed in the annexure, CRISIL commences review of the information, and eventually assigns a grade
  • Channel partner submits report to Project Approval Committee (PAC), and the application for approval of subsidy under the JNNSM scheme
  • PAC sanctions the proposal, and disburses the subsidy

Solar Energy Gradings Framework

Ministry of New and Renewable Energy (MNRE) mandated us to develop a detailed analytical framework to be used in grading channel partners. The framework was developed based on discussions with a variety of stakeholders, including manufacturers, system integrators, bankers, industry associations, and government officials in the solar energy sector. We sought opinion from them on the current scenario in the renewable energy sector and their expectations from it, and the best practices adopted by entities. The framework was then finalised based on feedback received from stakeholders.

 

The framework was also validated using a comprehensive exercise that involved testing the framework on entities identified by MNRE, which then adopted the framework and approved of its use in grading channel partners.

Framework for Assessment of System Integrators

Performance Capability

  • Promoter Track Record
    • Solar capacity installed
    • Promoters' relevant track record
    • Quality of second-tier management team
  • Technical Expertise and Adequacy of Manpower
    • Technical expertise
    • Adequacy of manpower
  • Quality of Supplier And Tie-Ups
    • Quality of suppliers
    • Supplier feedback
  • Customer And O&M Network
    • Customer feedback
    • O&M capabilities

 

Performance Capability Grading
 

Financial Strength

  • Sales
  • Return on capital employed
  • Total outside liabilities/ tangible net worth
  • Interest coverage
  • Net worth
  • Feedback of bankers on conduct of account and integrity
  • Current ratio

 

Financial Strength Grading

 

Final Grade

Framework for Assessment of Renewable Energy Service Companies (RESCOs)

Performance Capability

  • Promoter Track Record
    • Promoter's qualification and technical competence
    • Monetary value of capacity Installed
    • Promoter's track record
    • Quality of management
    • Tie-ups with system integrators
  • Project Management Capability
    • O&M capabilities and tie-ups
    • Quality of EPC contractors and equipment suppliers
    • Supplier/EPC feedback
  • Customer Concentration, Quality and Ability to Manage Receivables
    • Quality of customers
    • Collection capability

 

Performance Capability Grading

 

Financial Strength

  • Net worth
  • Bankers' feedback
  • Financial flexibility
 
 

Project-Related Assessment

  • Gearing
  • Debt service coverage ratio
  • Interest cover
  • Project IRR

 

Financial Strength Grading

 

Final Grade

Get your business graded

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Questions?

  • Interested in our SME offerings? Please call or email us at:
    +1800 103 3453
    crisil_sme@crisil.com

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