India’s solar power space has emerged as a bright spot for investors amid the global slowdown, with contracts for 14,000MW (mega watt) of new projects, roughly 40% of the current installed capacity, being awarded since the coronavirus pandemic hit the world, government data shows.
At a ballpark cost of Rs 4 crore per MW, one of the lowest in the world, the projects awarded since February would entail investments of Rs 56,000 crore. These include 8,000MW capacity with local manufacturing.
A majority of these bids were put in when economies across the world were under lockdown. India went into lockdown from March 25 and gradually started lifting the curbs from June.
Power and renewable energy minister Raj Kumar Singh said India also established a new record low in solar power tariff during the pandemic period. In June, Spanish developer SolarPack quoted a tariff of Rs 2.36 per unit for one of SECI’s 2,000MW inter-state projects, beating the previous record of Rs 2.44 per unit set in May 2017 during the bidding for Rajasthan’s Bhadla solar park.
Government officials said reduction in corporate tax from 30% to 22% last year, easy access to cheap funding and emerging technology have together helped whet investor appetite by reducing overall project costs. The average per-MW price has currently come down to roughly Rs 4 crore from Rs 5 crore a few years ago.
Two projects of 1,200MW each were awarded in February and April at tariffs of Rs 3.97 per unit and Rs 2.50, respectively. This followed a 6,000MW manufacturing-linked project at a tariff of Rs 2.90 and 400MW round-the-clock unit at a tariff of Rs 2.92 in June. Two more projects of 2,000MW each were awarded in July at tariffs of Rs 2.35 and Rs 2.90, respectively. NTPC awarded 1,200MW at Rs 2.43 per unit in August.
Germany’s International Technology Roadmap for Photovoltaic (ITRPV), which aims to track solar power price falls and rising conversion efficiencies, recently said module costs declined 10% and cell costs 20% last year. Wood Mackenzie report in June also saw a price decline on 16-20% on expanding deployment of new technology.
