Indian solar tariffs well below three rupees in new Rajasthan records

Share on facebook
Share on twitter
Share on linkedin
Share on reddit
Share on email
Solar is now cheaper than average power puchase cost (APPC) in India. Flickr: Christian Hauger

UPDATED: Indian solar prices have continued their downward spiral, this time with record low bids of INR2.62/kWh (US$~0.04) from Phelan Energy Group and Avaada Power in the state of Rajasthan.

Solar Energy Corporation of Indian (SECI) made a total of 250MW available at this particular section of the Bhadla Solar Park, the infrastructure of which is being built by Indian conglomerate Adani.

The winning bidders were as follows:

Developer capacity (MW) Tariff (INR/kWh)
Phelan Energy Group 50 2.62
Avaada Power 100 2.62
SBG Cleantech 100 2.63

The dip below the three rupee mark is highly significant with Jasmeet Khurana, associate director, consulting at Bridge to India taking to Twitter to announce that solar is now cheaper than average power puchase cost (APPC) in India.

SBG Cleantech is a joint venture between Japan’s Softbank, Taiwan’s Foxconn and India’s Bharti Enterprises.

The industry was shocked by low bids for a levelised tariff of INR3.30/kWh At Rewa, Madhya Pradesh, in February. Prices dipped further with Solairedirect’s winning bid of INR3.15/kWh for 250MW(AC) in Andhra Pradesh last month.

Now they have dropped significantly further. The massive levels of oversubscription (3.25GW) for this tender did signal that the records were likely to break again in any case. SECI's next tender at Bhadla, for the 500MW section built by IL&FS was also hugely oversubscribed (5.5GW).

Jasmeet Khurana told PV Tech: “Industry was expecting Bhadla tariffs to be lower than INR 3.15/kWh, i.e., the lowest tariff discovered in the NTPC tender in Kadappa. That would have been explainable as Bhadla had lower solar park charges and a higher irradiation than Kadappa.

“We wouldn't have been surprised if the tariffs fell to as low as INR 2.85/kWh. However, it seems that developers in India always find a way to surprise you.

“If prices continue to fall at the same rate, solar-plus-storage will be a genuine alternative to thermal base load sources in the next 3-4 years.”

Ali Imran Naqvi, head, strategic consulting, Gensol Consultants, said: “The audacity with which the bidders have raced to grab a portion of the offering by SECI might seem to be churlish but is, certainly, emblematic of some refined sensibility of the Indian solar and financial markets.

“The manner in which Phelan, a South African IPP, has gatecrashed into the Indian market is saddled, concomitantly, with questions and expectations. The reason why we say this is because our analysis reveals that the quoted tariff (INE2.62/kWh) has some really deep financial as well as technical moorings; for example, the EPC cost needs to be around INR20 million per MW DC (or USD 0.3 million per MWp), keeping in mind that 27.7% AC CUF is achievable at Bhadla with a DC overloading of 38%, to pull off a sub-9% equity IRR. This kind of cost is an oasis of illusion at the moment, but cannot be ruled out.

“Only time will tell as to who will get the better of whom – a refined sensibility or churlish audacity.”

Read Next

October 27, 2021
Colombia has awarded contracts to 11 solar PV projects with a combined capacity of 796.3MW in its third renewable energy auction.
October 27, 2021
India installed around 8,811MW of solar between January and September 2021, a 280% increase on the same period of 2020, according to JMK Research & Analytics.
PV Tech Premium
October 22, 2021
Average winning solar bids in Spain’s renewables auction this week came in above those for wind as interest among PV bidders faltered against a backdrop of rising equipment costs and regulatory uncertainty.
October 20, 2021
Spain’s latest renewables auction closed with solar PV bidders being awarded just 866MW of capacity, with players such as Naturgy and Bruc among the winning participants.
October 19, 2021
Shortlisted bids in Saudi Arabia’s latest solar tender have jumped significantly on the lowest price recorded in the country’s previous renewables programme, reflecting the hikes in PV equipment costs in recent months.
October 13, 2021
Reliance New Energy Solar (RNES) has invested US$29 million in German wafer technology company NexWafe’s Series C financing round as it looks to establish wafer production facilities in India.

Subscribe to Newsletter

Upcoming Events

Upcoming Webinars
November 10, 2021
8am (PST) | 5pm (CET)
Solar Media Events
December 1, 2021