SkyPower Southeast Asia Holdings has put in the lowest winning bid ever for solar projects in India at INR5.05 (US$0.080) per kWh for a 50MW project in Madhya Pradesh.

In total, the firm put in three bids all under INR5.3 per kWh for 150MW of solar projects in the state.

Jasmeet Khurana, senior consulting manager at analyst firm Bridge to India, told PV Tech that SkyPower’s low bid is “aggressive” and “surprising”.

However he also said: “Given the euphoria in the Indian solar market these days, it is perhaps not startling.”

For example, he pointed to massive oversubscription for bids in the state of Telangana, for which results have yet to be released. Similarly, the Madhya Pradesh auction was oversubscribed by 1200%, with a record 100 companies putting in bids for a total of 3744MW capacity.

Khurana added: “Those comparing these bids to other state level bids from last year will be unable to justify it. There has been a 10% reduction in EPC costs from last year but even that doesn't add up to the lowest bid in Madhya Pradesh. It seems to be more about intense competition and strategic positioning by developers.”

Raj Prabhu, chief executive and co-founder of Mercom Capital Group, told PV Tech that the SkyPower bid was “very low”, although there have been bids as low as INR5.25 per kWh in the state of Andhra Pradesh.

However, he added: “Several banks we spoke with before we released our Quarterly India Update in April mentioned that INR6-6.5 per kWh was a ‘workable’ tariff based on current market conditions.

“There is no guarantee that these projects will be profitable or will be the quality needed to last 25 years at optimal performance. In this particular auction in Madhya Pradesh, it looks like large solar developers did not win because they did not want to bid at these low unworkable levels.”

For example, established solar developers, Adani, SunEdison, ACME, Reliance, First Solar and Welspun all missed out on the tender awards.

Prabhu also said that the oversubscription was likely to be the result of a long period since the last auction was held in India.

Other notable winners of the cumulative 300MW awarded in Madhya Pradesh included

  • Narbheram Vishram (30MW)
  • Made Easy Education (10MW)
  • Rays Power Experts (12MW)
  • Renew Solar Power (51MW)
  • Hero Future Energies (38MW)

Hero Future Energies was the highest winning bidder at INR5.64 per kWh.

Sunil Jain, chief executive, Hero Future Energies, said: “We continue to show our deep understanding of solar bidding to constantly win projects at viable VGFs and tariffs. We will continue to participate in all future bids including National Solar Mission.”