The race to the bottom continues at a furious pace, thanks to Solar Parks. Within a span of 3 months, Solar tariff quoted by winning bidders has dropped by more than 25%. From Rs. 3.29/kWh(Rewa Solar Park, Madhya Pradesh) in February 2017, the tariff has reduced to Rs. 2.62 in May 2017(Bhadla Solar Park, Rajasthan), touching Rs. 3.15/kWh enroute in April 2017(Kadapa Solar Park, Andhra Pradesh).
In the auction completed yesterday for allocation of 250 MW in Bhadla Phase IV Solar Park, Rajasthan, 3 firms won the bid, the details of which are as follows. (Source)
- Phelan Energy (50MW) – Rs 2.62/kWh
- Avaada Power (100 MW) – Rs. 2.62/kWh
- Softbank Cleantech (100 MW) – Rs. 2.63/kWh
(Avaada Power is the company founded by the Welspun Renewables team after Welspun had sold of its portfolio of more than 1 GW of renewable energy assets to Tata Power. So they know what they are doing…)
One factor that has been attributed to the low bids is the “Triparty agreement between (TPA) between the Reserve Bank of India, the Union government and the state governments, which provides comfort to power producers against payment defaults by state electricity boards (SEBs)”. The drop in module prices and the prospect of strengthening Rupee are also factors that influenced the quoted tariff.
But still – Rs.2.62/kWh? Where will the tariff stabilize? Let’s wait for the next auction..
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