The tariff had fallen to Rs 2.44 per unit only once before, in a SECI auction for projects at the Bhadla Solar Park in May 2017, but had been climbing significantly in subsequent auctions
BENGALURU: Solar power tariffs touched Rs 2.44 per unit once more, the lowest they have ever reached, in the latest 2000 MW auction conducted by Solar Corporation of India (SECI). Acme Solar, one of the biggest domestic solar developers, with around 875 MW of commissioned solar projects, won 600 MW with this bid.
The tariff had fallen to Rs 2.44 per unit only once before, in a SECI auction for projects at the Bhadla Solar Park in May 2017, but had been climbing significantly in subsequent auctions, the highest reached being Rs 2.94 to Rs 3.54 per unit in an 860 MW auction across different talukas of Karnataka, held by the Karnataka Renewable Energy Development Ltd (KREDL) in February this year. Other auctions by Gujarat, Maharashtra and NTPC too have seen winning tariffs of well over Rs 2.50 per unit.
The other winners at the auction were Shapoorji Pallonji, which won 250 MW bidding Rs 2.52 per unit, along with Azure Power, Hero Solar and Mahindra Susten, all three of which bid Rs 2.53 per unit. While Azure Power won 600 MW, Hero and Mahindra got 250 MW each. The remaining 50 MW was awarded to Mahoba Solar at Rs 2.54 per unit. All 2000 MW of projects will be connected directly to the Inter State Transmission System (ISTS).
Industry sources attributed the sharp fall to developments in China, from which around 80% of the solar panels and modules used in Indian solar projects are imported. In end-May, the Chinese government stopped approving further solar projects and cut subsidies for its solar developers, as it felt the sector was expanding too fast. With local demand falling, Chinese solar manufacturers have no choice but to export, leading to a weakening of prices. India accounted for 30.9% of China’s solar exports in 2017, according to the China Chamber of Commerce for Import and Export of Machinery and Electronic Products.
Solar tariffs had been rising for the past year due to two main reasons – the rising cost of solar panels from China, and the possibility of safeguard duty being imposed on Chinese solar imports ever since domestic manufacturers complained to the Director General, Safeguards that Chinese imports were seriously hurting their industry. However, domestic manufacturers do not have the capacity to meet India’s solar equipment requirements, sparked by its ambitious programme of achieving 100 GW of solar capacity by 2022. A decision on safeguard duty is expected shortly. But the trend of rising Chinese panel prices has clearly been dramatically reversed.
Source: reuters
