Solar power tariffs in India dropped to a new low of Rs 2.44 on Friday during an auction for the 500 megawatt (MW) capacity Bhadla solar power park in Rajasthan.
While ACME Solar Holdings won the bid by quoting Rs 2.44 per unit for 200 MW, SoftBank Energy quoted Rs 2.45 per unit and got the contract for building the remaining 300 MW. Two days ago, the lowest bidder for the 250 MW segment of the park had quoted Rs 2.62 per unit. Soon after, Power Minister Piyush Goyal tweeted, “Green future: Latest solar power auction at Bhadla Solar Park 3 sets new record with electricity tariff of Rs 2.44/unit,”
The Bhadla park is being developed by IL&FS. A Solar Energy Corporation of India official said several factors had led to the low rates. “The main factors contributing are the 7-8% higher yield in Rajasthan due to better solar radiation conditions, drop in module prices in the international market, and strengthening of the Indian rupee against the US dollar,” SECI Managing Director Ashwini Kumar told Business Standard. He added that the lack of any big tender, the park capacity, cheap financing and capital options were some of the other contributing factors.
In the last six years, the tariff has fallen by almost 80%, an unprecedented drop across the world, according to Business Standard. Since November 2015, when the rates had dropped to Rs 4.63 per unit after aggressive bidding by US-based SunEdison, the tariff has been on the downtrend, reported Moneycontrol. Before it dropped to 2.44 per unit on Friday, solar power tariffs had fallen to an all-time low of Rs 3.15 per unit in April. This was during the auction of a 250 MW project in Andhra Pradesh.
By 2022, the government wants to raise its renewable energy to 175 gigawatt, as part of the Paris climate change agreement. Companies have been bidding for low tariffs for solar and wind projects to challenge the power generated by fossil fuels in the future.