Indian Solar Power Bids Stabilise At US$7/kWh In Absence Of Foreign Competition

In the absence of international project developers who had driven solar power bids to historic lows in India, fresh bids seem to have stabilised at around US$7/MWh.

In one of the recent solar power auctions in India the competition among bidders remained very high but the lowest tariff was in-line with those seen in other auctions where foreign developers had failed to make the cut.

A total of 350 MW solar power capacity was auctioned in the southern Indian state of Telangana. The winning bids were Rs 4.66/kWh and Rs 4.67/ kWh (US¢7.00/kWh). Five developers managed to secure 350 MW capacity within this tight bidding range.

ReNew Power Ventures and Azure Power won 100 MW capacity each while Karvy Consultants Adani Enterprises and ACME Solar won 50 MW capacity each. All these developers, except Karvy Consultants, are some of the most active project developers in the Indian solar power market. Karvy Consultants is one of the India’s largest integrated financial services provider.

Again, no foreign developers could secure any project. It was not immediately clear which foreign developers participated. Last year, the likes of SunEdison, SkyPower Global, SBG Cleantech and Fortum Group had driven the solar power tariffs to record-low levels of Rs 4.34/kWh (US¢6.5/kWh).

Following the bankruptcy protection filing by SunEdison the participation by foreign project developers has gone down sharply. And in their absence Indian developers have managed to win many projects at comparatively higher tariffs.

While the recent bids of around Rs 4.70/kWh (US¢7.1/kWh) are at a premium of around 8% to the lowest bid ever in India they are at a discount of 19% to the benchmark tariff set by the Indian regulatory body for the current financial year.