Low bids in Punjab solar auction cause more concern over Indian project viability

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Another set of low winning bids in India from the latest 500MW solar auction in the state of Punjab has caused more “serious concern” about the viability and quality of solar projects in India, according to two industry figures.

Today, PV developer Photon won 150MW of solar capacity with the lowest bid of INR5.09/kWh (US$0.076) for a 50MW project. The news continues the trend for low winning prices for auctions in India, with SkyPower Southeast Asia Holding’s winning bids of INR5.05/kWh in Madhya Pradesh in July and INR5.17/kWh in Telangana in August.

Ashish Verma consultant at Gensol Solar and Anmol Jaggi managing director of Gensol group, who were both present at the Punjab announcement, confirmed the results of today's auction with PV Tech:

  • Photon 3x 50MW projects at INR5.09, INR5.27 and INR5.57/kWh
  • Azure Power 3x 50MW projects at INR5.62, INR5.63 and INR5.64/kWh
  • Prayanta 2x 50MW projects at INR5.8 and INR5.95/kWh
  • Mytrah 1x 50MW project at INR5.97/kWh
  • Hindustan Clean Energy 1x 50 MW INR5.98/KWh

The five winning developers were chosen out of a total of 18 technically qualified bidders.

Verma and Jaggi said that continuous falling level one bidding tariffs are raising “serious concern” about project viability and project development quality within India’s solar sector, which continues from concerns raised immediately after low bids won in the Madhya Pradesh auction in July.

Both Verma and Jaggi also highlighted that Punjab receives lower irradiation compared to Madhya Pradesh, which received similar bidding results, and Punjab also has higher land rates than any other state in India, they claimed.

They said it was positive that the capacity had been awarded in blocks of 50MW, but said land prices had reached a peak. They said the projects would require “timely” land availability at “reasonable prices” to go ahead.

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