Bids in the India’s solar power market have crashed sharply ever since the government launched the National Solar Mission, data released by the Ministry of New and Renewable Energy shows.
According to the Ministry, average solar power tariffs in India have fallen by 73% since 2010, as Mercom reports. This has been the result of increased competitiveness and sharp decline in module and other solar equipment prices.
The first auction in December 2010 under the central government policy of National Solar Mission saw developers bidding between Rs 10.95/kWh (17.00¢/kWh) and Rs 12.76/kWh (20.00¢/kWh). A total of 150 MW solar PV capacity was auctioned with a weighted average bid of Rs 12.16/kWh. The auction saw participation mostly from Indian companies that did not have much experience in installation of solar PV projects.
At that time of the 2010 auction, India’s installed solar power capacity was less than 20 megawatts, now it stands at over 12,000 megawatts. When the National Solar Mission was announced in 2009 the target was to have 22,000 megawatts of operational capacity by March 2022. This target was upgraded to 100,000 megawatts in 2014.
Tariff began to slide even more quickly following this decision with several Indian as well as foreign project developers looking to set up large-scale solar power projects. The Indian government also distributed capacity addition targets among its own companies and organisations to boost growth. The Ministry of New & Renewable Energy announced plans to set up solar power parks with cumulative capacity of 40,000 megawatts. These solar power parks are the real drivers of record-low tariffs.
The recently completed auction of 750 megawatts solar power park in the state of Madhya Pradesh will receive funding at 0.25% from the International Finance Corporation (IFC). The solar power park auction yielded India’s lowest-ever tariff of Rs 3.30/kWh (5.1¢/kWh).