NEW DELHI- Indian solar power projects worth $2.24 billion are at risk of higher costs, including fines, due to the coronavirus outbreak in China -- a major supplier of modules, the local arm of ratings agency Standard and Poor's said on Monday.

Nearly three-gigawatts of solar projects auctioned between July and August 2018 could be at risk of penalties for missing a July 2020 deadline for completion as the virus disrupts their supplies, Crisil Ratings said, without naming individual projects.

The coronavirus outbreak, which has killed more than 1,700 people and infected 70,000 others, has hit the Chinese economy and disturbed global supply chains. 

Beijing has implemented measures such as restricting transportation and shutting down factories, including those that make modules, to combat the spread of the virus.

India buys about 80% of its solar modules from China. Purchasing them elsewhere would be between 15% and 20% costlier and could erode returns from the affected projects by up to 3%, the ratings agency said in a statement.

"(The) modules already manufactured are facing delays in transit to project sites on account of precautionary restrictions on transit at ports," Crisil said.

Orders for modules are mostly placed six months ahead of the start of commercial operations.

"Hence any delay at this stage can prove costly." said Manish Gupta, senior director at Crisil Ratings.

A delay of more than 90 days from the deadline could also lead to a downward revision in tariffs under their power purchase agreements, Crisil said, though it said project developers could invoke 'Force Majeure'.

"However, this is yet to be tested and may face legal and regulatory hurdles," it added.

($1 = 71.3850 Indian rupees)

(Reporting by Nidhi Verma Editing by Helen Popper) ((nidhi.verma@thomsonreuters.com; +91 11 49548031; Reuters Messaging: nidhi.verma.thomsonreuters.com@reuters.net))