Solar tariff creates history again, touches Rs 3.15/unit in AP Solar Park

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In all technical terms, solar tariff touched its historical lowest at the stroke of midnight Tuesday, April 11. During the bidding for the 250 Mw ultra-mega solar power park in Kadappa, Andhra Pradesh, by NTPC, the lowest bid received was Rs 3.15/unit. The winning bid is a levellised tariff for 25 years with no escalation.

This tariff is lower than what was received for the 750-Mw Rewa solar park in Madhya Pradesh, which saw the lowest bid of 2.97 per unit last month. However, the levellised tariff for the project comes out to be Rs 3.3 per unit for 25 years.

The bidding, which ran for close to 15 hours, saw French clean energy company Solairedirect emerge as the lowest bidder, for the complete 250 Mw. Other bidders in the fray were Greenko Energy, Azure Power, Mahindra Renewables and Ostro Energy etc.

Sector experts pointed out that falling panel prices are the reason for the low bids. Also, in the case of Kadapa, the project was offered by NTPC, which takes care of the power offtake and payment surety, thereby boosting the confidence of the private players, said a Delhi-based sector expert.

The solar power industry is expecting solar module prices to fall further owing to global oversupply. “Global prices of the solar module might fall 20 per cent this year. Currently, the price of module manufacturers of Tier-1 lies between 31-33 cents. Due to the oversupply in China, the price of the module is expected to fall down between 27-30 cents in the second half of 2017,” Vinay Goyal, CEO of Ganges Internationale Pvt Ltd, a solar EPC (engineering, procurement, and construction) player, told Business Standard in an earlier conversation.

The other reason pointed out for the aggressive bids was that the number of projects to be offered by the states are slowing down, with hardly any mega capacity in the pipeline. “Pace of new utility-scale solar tender announcements and project allocations slowed down considerably at just 4.2 Gw and 6 Gw, respectively, down 70 per cent and 33 per cent, respectively, over the last year. This downward trend in new allocations is likely to continue, perhaps for another six months, as the government seems to have gone back to the drawing board to incorporate learnings from the Rewa tender and India’s first wind tender,” said Bridge to India in its latest report.

Source: Business Standard

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