India Solar Bids Rise With Increase In Imported Module Prices

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The impact of increased imported solar power modules has become evident with the substantial rise in solar power bids in the recent auction.

The lowest tariff in an auction held by the Karnataka Renewable Energy Development Limited (KREDL) was Rs 2.94/kWh (¢4.6/kWh). The tariff is at a premium of 20% to the lowest solar power tariff recorded in India so far. The lowest tariff in India, of Rs 2.44/kWh (¢3.8/kWh), was discovered in an auction held last year by the Solar Energy Corporation of India (SECI) for projects in the Bhadla solar power park in Rajasthan. 

While the driving factor in the rise of tariff bids is likely the rise in price of imported solar power modules, especially those from China, there could be other factors as well contributing towards the appreciation in bids. The capacity offered in the KREDL auction will not be part of any solar power park instead it will be spread across 43 different locations with cumulative installed capacity of 860 megawatts. This increases the overall capital cost and cost of production.

Of the 860 megawatt capacity offered in the auction, 660 megawatts was offered under the open category, wherein developers are free to use imported or Indian-made modules, while 200 megawatt was reserved for Domestic Content Requirement category, wherein developers are mandated to use Indian-made modules.

According to media reports, bids were submitted only for 760 of the 860 megawatt capacity on offer. The entire 660 megawatt capacity offered in the open category was bid for while only 100 megawatt of the 200 megawatts capacity offered in the DCR category received bids.

The lowest bid of Rs 2.94/kWh (¢4.6/kWh) was submitted by Acme Solar and Shapoorji Pallonji Infrastructure Capital. Incidentally, Acme Solar currently holds the record for lowest solar power bid in India of Rs 2.44/kWh (¢3.6/kWh). Some of the top winners in the open category were Infrastructure Capital with 185 megawatts, Acme Solar with 106 megawatts, and ReNew Power with 99 megawatt.

The DCR category saw the lowest bid of Rs 3.52/kWh (¢5.5/kWh). Emmvee Photovoltaic secured 80 megawatts of capacity. The company has in-house solar module manufacturing capacity, making it easier to bid in this category.

The project developers will have 18 months to commission these projects.

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