Solar tariff likely to touch historic low

Tariffs for solar power could fall to as low as Rs 4.80 per unit compared with the average bids of Rs 5.50-6 per unit in the lest few tenders, reports Sumit Jha in New Delhi. The latest bid is for NTPC tenders under the Jawaharlal Nehru National Solar Mission (JNNSM) — the other bids were those for projects run by various state governments.

The bids are for 500 MW of solar capacity to be installed in Kurnool district, Andhra Pradesh. The bidding process continued intensely till late in the evening on Wednesday and was likely to spill over to Thursday. JNNSM is the flagship scheme of the government of India for inviting bids.

Experts say the reason for historically low bids could partly be explained by the presence of NTPC as the nodal agency as the thermal power giant has tripartite agreement with state that guarantees counterparty security. NTPC would sell this power to state utilities through its trading arm NTPC Vidyut Vitaran Nigam.

This is also the first competitive bidding for solar that has seen Japan’s telecommunications giant SoftBank’s joint venture with Bharti Enterprises and Foxconn participate. Sources FE spoke to said that the the joint venture, SBG Cleantech, has put in bids for the entire capacity at Rs 4.79 per unit. SoftBank had earlier announced its intention of investing $20 billion dollar in the country’s renewable energy sector.

Although, the tariff has progressively come down in the last two to three years, this year has seen a rapid drop with the average tariff discovered in the range of Rs 5.50-6 per unit in the last three tenders floated by state governments.

The current tender has seen participation from foreign players like First Solar and SunEdison and includes China’s Trina Solar.

[“source -financialexpress”]