Indian Solar Tariffs Stable At 4¢/kWh After 1 Gigawatt State Tender

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Solar power tariff bids in India seem to have stabilized around 2.71/kWh (4¢/kWh) in the latest major auction for utility-scale solar power projects.

After several delays, India’s largest power distribution utility, Maharashtra State Electricity Distribution Company Limited (MSEDCL), managed to auction 1 gigawatt of solar power capacity. Some of the largest solar power developers in India secured a substantial share in the auction. Charanka Solar Park Gujarat, India

Adani Green Energy, ReNew Power Ventures, Acme Solar, Tata Power Renewable Energy, and Azure Power won rights to develop projects with capacities between 130 megawatts and 250 megawatts. These companies placed bids of 2.72/kWh (4¢/kWh) each.

The bid levels were in line with a recent tender of 750 megawatts of capacity organized by NTPC Limited. That tender was for the Pavagada solar power park in the state of Karnataka. The auction not only attracted bids for 3,500 megawatts (an over-subscription of around 370%) but the winning bids were also up to 11% lower than the bids in proceeding state auctions.

Why the fall?

Solar power tariff bids in India fell as suddenly as they increased late last year. Tariffs bids in the Gujarat solar power auction were 4.38¢/kWh and above. The auction was canceled as the state distribution utility found the tariffs to be too high compared to recent auctions.

We asked a seasoned professional of the Indian solar market to shed some light on this trend.

“The rise and fall in solar tariff bids are linked to the policy action we have seen in the last few months. Customs duty on imported solar modules had a major impact on tariff bids by developers, they have been withdrawn now. The scare of safeguard duties and anti-dumping duties still remains. However, the recent decline in the tariffs came after the Ministry of New and Renewable Energy issued a notification stating that developers would be compensated if the cost of development increases in the future, like it is currently practiced in the thermal power sector.”

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An avid follower of latest developments in the Indian renewable energy sector.

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