Solar auction tariff hits new low of Rs 1.99 per unit
The current environment of lower interest and expectations of further decline in panel prices have also contributed to low rates.
The latest solar auction has discovered a tariff of Rs 1.99/unit, a new low. The lowest tariff found previously was Rs 2/unit in the November auction. Power from these solar units will be bought by Gujarat. According to sources, state-run NTPC, Torrent Power, Saudi Arabia-based Al Jomaih Energy and Water Co and Aditya Birla Renewables quoted the lowest tariff for building 200MW,100MW,80 MW and 120MW solar projects, respectively.
NTPC and Al Jomaih were also the winners in the November auction where prices dropped to Rs 2/unit. Industry watchers said that having an assured buyer for power was a key driver to the discovery of record low tariff amid fiercely competitive bidding.
The current environment of lower interest and expectations of further decline in panel prices have also contributed to low rates. Module prices currently stand at $0.17/wp, around 13% lower than last year.
Average cost of debt for NTPC fell 54 bpsy-o-y to 6.37% in the first half of FY21. It will also gain from a lower tax rate since the project will be set up under a new company NTPC Renewable Energy. The FY21 Union budget had extended the concessional corporate tax rate of 15%, earmarked for manufacturing companies, to new domestic electricity generation firms, effectively reducing their tax incidence by ten percentage points.
The country has set a target to raise the capacity of installed renewable energy generation plants from the current level of 89 GW to 175 GW by the end of 2022. About 35 GW is under various stages of implementation and 30 GW under various stages of bidding. If the 45.7 GW of hydro and 6.8GW of nuclear capacities are included, the target under the Paris climate change accord of having 40% of installed power generation capacity from non-fossil fuel sources can be achieved by 2022 itself.
Source : financialexpress
