Indian solar tariffs breach three rupees in ‘transformational’ auction

Facebook
Twitter
LinkedIn
Reddit
Email
The auction is still ongoing with the winner yet to be announced, but it is known that the tariffs have gone as low as INR 2.992/kWh (US$0.045). Credit: SECI

Indian solar tariffs have reached a paradigm shifting new low after the final reverse auction round for 750MW capacity in Madhya Pradesh followed through into a nail biting second day.

At the time of writing, the Rewa solar park auction is still ongoing with the winner yet to be announced, but it is known that the utility-scale tariffs have gone as low as INR 2.992/kWh (US$0.045).

This article requires Premium SubscriptionBasic (FREE) Subscription

Try Premium for just $1

  • Full premium access for the first month at only $1
  • Converts to an annual rate after 30 days unless cancelled
  • Cancel anytime during the trial period

Premium Benefits

  • Expert industry analysis and interviews
  • Digital access to PV Tech Power journal
  • Exclusive event discounts

Or get the full Premium subscription right away

Or continue reading this article for free

As the tariffs breached the US$5 cents mark for the first time ever in India and later went below 3 rupees, analysts announced that even thermal energy will now have trouble competing with these prices.

It is important to note that the tariffs in this case include an escalation of INR 0.05/kWh per annum for 15 years, but prices have plummeted to such an extent on this occasion that heads will be turned across India’s entire power system – not to mention the heads of solar advocates across the globe.

Rajnesh Trivedi, senior director, sustainable investment banking at Yes Bank, told PV Tech that there are several financial reasons for the bids being able to go so low.

Firstly, since the previous lowest utility-scale solar bid from Finnish firm Fortum at INR 4.34/kWh 13 months ago, the loans tenor has gone up, meaning that banks today can give loans up to 19 years.

Secondly, interest rates have fallen further over the last 18 months to around 9.5%.

Thirdly, as has been well documented, module prices have decline 28-30% during this period, although there has been a slight correction in module prices of late.

Other reasons unique to the Rewa project include an 18-month development period, so developers can put in advance orders for modules and bank on module prices decreasing further in the interim period.

Trivedi added: “There is a guarantee which is available from Solar Energy Corporation of India (SECI), which basically means that the risk is totally protected. Secondly, there is a further upside in terms of transmission – also for evacuation – if there are any issues; the government is going to give you a protection.”

“All these bids are happening on certain calculations, which are clearly demonstrated in the market […], but going below 3.50 rupees is surely a price which nobody had anticipated.”

Jasmeet Khurana, associate director consulting at Bridge to India noted solar’s impact on other sources of energy on Twitter. PV Tech will feature a detailed analysis of the new lows from Khurana in the coming days:

The first round of bidding on Wednesday had already set the tone for breaking records, with several players Sembcorp, Softbank and Solenergi putting in bids that were around the same levels that analysts had forecast to be the final prices. Meanwhile a total of 18 companies were still in the running, so it was inevitable that prices would go even lower in the final round.

Tim Buckley, director of energy finance studies, Australasia, Institute of Energy Economics and Financial Analysis (IEEFA) told PV Tech: “This is transformational and it’s a bit like the Fortum news a year ago. At the time everyone [doubted] it and said look, INR 4.34/kWh can’t be replicated; it’s not commercial; it’s not viable; it won’t be repeated.”

More to follow on this story.

Read Next

October 6, 2025
Indian infrastructure company focused on rooftop and ground-based solar power installations, PVV Infra has secured solar power orders worth INR7.9 billion (US$90 million) through two of its subsidiaries. 
October 6, 2025
Indian solar developer ACME Group has established a new subsidiary to manage its renewable equipment manufacturing business, under which it is planning to scale production of TOPCon PV modules.
October 6, 2025
Rajasthan government will develop 500MW/2,000MWh of standalone battery energy storage systems (BESS) with a four-hour single-cycle configuration and extended operational life.
October 2, 2025
The Indian solar industry has 86GW and 182GW of solar cell and module manufacturing capacity, respectively, expected to be commissioned by 2027.
October 2, 2025
The Indian Department of Commerce has launched an antidumping investigation on solar encapsulants originating or exported from South Korea, Vietnam and Thailand.
September 29, 2025
Indian solar manufacturer Waaree has said it does not expect to pay additional duties on its solar cell imports to the US, following the start of an antidumping and countervailing duty (AD/CVD) investigation by the US Customs and Border Patrol (CBP).

Subscribe to Newsletter

Upcoming Events

Solar Media Events
October 7, 2025
Manila, Philippines
Solar Media Events
October 7, 2025
San Francisco Bay Area, USA
Solar Media Events
October 21, 2025
New York, USA
Solar Media Events
November 25, 2025
Warsaw, Poland