Solar power tariff sees unprecedented fall, tumbles to Rs 2.44 a unit
Solar tariff in India has fallen from 2.62 per unit to Rs 2.44 in the past two days, and by as much as 80 per cent in six years. Such a massive fall is unprecedented for solar power rates across the world.
In the bidding held for the 500 Mw Bhadla solar power park in Rajasthan, domestic company ACME won the top slot by quoting Rs 2.44 per unit for 200 Mw. It was closely followed by SoftBank Energy with Rs 2.45 per unit for 500 Mw. As the tender followed the bucket filling method, ACME will build 200 Mw and SBG Energy will build the balance 300 Mw capacity. The park is being developed by IL&FS.
Government officials pointed out that this tariff was lower than the average coal-based price in the country and the grid parity price for solar power was set to match with coal. This rate is closer to spot power price as well.
Two days ear;ier, for the 250 Mw segment of the park developed by Adani Power, South African company Phelgan Energy Group Limited and Avaada Power Group, promoted by Vineet Mittal’s Welspun Energy, quoted Rs 2.62 per unit, Japan’s SoftBank Energy followed with a quote of Rs 2.63 per unit.
The tariff in Bhadla was fixed for 25 years with no escalation and the bidders had sought no viability-gap funding from the government, officials said.
“… The main factors contributing (to the low tariff price) are the 7-8 per cent higher yield in Rajasthan due to better solar radiation conditions, drop in module prices in the international market, and strengthening of the Indian rupee against the US dollar,” said Ashwini Kumar, managing director, Solar Energy Corporation of India (SECI). SECI is a wholly owned public sector unit of the Ministry of New and Renewable Energy which executes solar bidding.
The lack of any mega tenders hereafter, the large size of the park capacity and the influx of cheap financing and capital options were also cited as reasons for the discovery of such low bids.
