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India Solar Power Tariffs

Indian Lawmakers Propose Tariff Reduction For Operational Solar Projects

written by saurabh

Lawmakers of Indian state of Tamil Nadu recently revealed that they are negotiating with at least one solar project developer to reduce tariff. This could trigger a bad precedent across India as bids for new solar projects continue to decline rapidly.

The project in question in Tamil Nadu is no ordinary solar project. The government of Tamil Nadu is looking to get Adani Green Energy reduce tariff of its 648 megawatt project – the largest in India.

The Adani project, commissioned last year, gets paid Rs 7.01 (11¢) for every unit of electricity it feeds into the grid. That’s a massive premium to the current lowest tariff bid in the country, nearly three times as much.

Tamil Nadu recently issued a tender for 1.5 gigawatts solar power capacity and set a maximum tariff at Rs 4.00/kWh (6.2¢/kWh). It is clear that the government wants to check any ‘unjust’ profits that the developers may be getting due to advancements in technology and the share decline in module prices over the last several months.

A similar attempt was made in 2015 in the state of Gujarat. The projects in question at that time were among the first utility-scale solar power projects in India which predate even the National Solar Mission. The very first projects commissioned in Gujarat are still getting tariffs as high as Rs 12/kWh (19¢).

Power utilities in Gujarat approached the regulators to reduce tariffs of these operational projects but did not find any success. The matter was dragged into a court which ruled in favour of the developers.

Any retrospective reduction in tariffs will also send the wrong message to project developers which could put brakes on India’s march to become one of the largest solar power markets in the world. Any doubt in the developers’ mind could make them ask for new PPA templates which could elongate the regulatory procedures and delay project execution.

Screengrab from NatGeo documentary on Adani Energy solar power plant

07/12/2017 0 comment

Renewable Energy

As Tariff Bids Crash, Indian States Look To Renegotiate Tariff For Operational Solar Projects

written by saurabh

The trend of retrospective reduction in solar power tariffs seen in Europe few years back has now propped up in India.

The project in question in Tamil Nadu is no ordinary solar people. The government of Tamil Nadu is looking to get Adani Green Energy reduce tariff of its 648 megawatt project – the largest in India.

The Adani project, commissioned last year, gets paid Rs 7.01 (11.00¢) for every unit of electricity it feeds into the grid. That’s a massive premium to the current lowest tariff bid in the country, nearly three times as much.

Tamil Nadu recently issued a tender for 1.5 gigawatts solar power capacity and set a maximum tariff at Rs 4.00/kWh. It is clear that the government wants to check any ‘unjust’ profits that the developers may be getting due to advancements in technology and the share decline in module prices over the last several months.

Power utilties in Gujarat approached the regulators to reduce tariffs of these operational projects but did not find any success. The matter was dragged into a court which ruled in favor of the developers.

06/26/2017 0 comment

Renewable Energy

Tariff Bids For Domestic Content Solar Projects In India Falls To Lowest-ever

written by saurabh

Even as India lost review of an earlier WTO decision that found mandatory use of Indian-made solar equipment against international norms, leading project developers in the country placed lowest-ever bids for projects based on domestic content requirement.

Solar Energy Corporation of India (SECI) auctioned off two solar power projects at one of the largest solar power parks in the country. Tata Power Renewable Energy and Adani Green Energy secured rights to develop projects of 50 MW capacity each. The projects shall form part of the Pavagada solar power park in Karnataka.

Both the projects are required to use only Indian-made solar power equipment, including modules. The companies placed bids of less than Rs 5.00/kWh (US$7.5/kWh), the lowest-ever for projects auctioned under the Domestic Content Requirement scheme.

The Pavagada solar power park is still in its very initial stages of development. While a total capacity of 5 GW has been proposed, plans for only 2 GW have been shared in the public so far.

NTPC auctioned 500 MW capacity for the solar park. The capacity was allocated to six developers who are free to choose Indian or imported solar power modules for their projects. Adani Power, Tata Power Renewable Energy and Fortum India secured 100 MW capacity each at tariff of Rs 4.79/kWh (US¢7.9/kWh).

09/28/2016 0 comment

Renewable Energy

Indian Solar Power Tariffs Likely To Fall To US¢5.2/kWh In 3 Years

written by saurabh

Solar power tariff bids are set to fall sharply over the next three years in India as the country pushes on with capacity addition.

Industry experts told Indian media outlets that solar PV tariff bids are likely to fall to Rs 3.50/kWh (US¢5.2/kWh) over the next three years. The current lowest solar tariff bid in India stands at Rs 4.34/kWh (US¢6.5/kWh). For the last few months the auctions have seen bids between Rs 4.35 and Rs 4.80/kWh (US¢6.5-7.1/kWh).

Solar power tariff bids in India saw sharp correction during 2015 as foreign project developers competed for large-scale solar power projects across the country.

First SunEdison and then Finland-based Fortum Group set lowest tariff bids in India. The second wave of low tariffs came from the Indian project developers. Recently, Indian project developers set tariffs of around Rs 4.35/kWh (US¢6.5/kWh).

Indian experts expect tariffs to fall further due to fall in solar panel prices and improvement in efficiency. The government has also announced massive plans to set up additional large-scale solar power projects. Recently, the government revealed plans to double the capacity earmarked for solar power parks to around 40-50 GW.

Solar power tariff bids have already fallen sharply over the last few years – around 50% over the last five years – as the Indian market attracted investors from world over and found tremendous support from the government which aims to have 100 GW capacity operational by March 2022.

The first solar power auction in India was held in December 2010 under the first phase of the National Solar Mission. Successful project developers had quoted bids between Rs 10.95/kWh (US¢16.0/kWh) and Rs 12.76/kWh (US¢19.0/kWh) for 150 MW solar PV capacity.

07/31/2016 0 comment