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Solar power tariff hits record low of 3.15 a unit
Solar power tariff dwindled down to a new low on Wednesday during an auction carried out by NTPC Ltd’s 250 Mega Watt (MW) project at Kadapa in Andhra Pradesh. Solar power tariff touched as low as Rs 3.15 per unit as tweeted by Power and Renewable Energy Minister Piyush Goyal. At current rates, solar power generation cost is at par with that of thermal power generation.
Hyderabad: Solar power tariff dwindled down to a new low on Wednesday during an auction carried out by NTPC Ltd’s 250 Mega Watt (MW) project at Kadapa in Andhra Pradesh. Solar power tariff touched as low as Rs 3.15 per unit as tweeted by Power and Renewable Energy Minister Piyush Goyal. At current rates, solar power generation cost is at par with that of thermal power generation.
NTPC’s project has been awarded to the Indian arm of French clean energy firm Solairedirect SA, which already has 182 MW of projects in the country. Out of this, 97 MW project is in operation and 85 MW under construction.
According to an official at NTPC, the previous low was Rs 3.3 a unit levelised tariff recorded when the 750 MW project at Rewa in Madhya Pradesh was auctioned by Rewa Ultra Mega Power Ltd in February. Levelised tariff indicates the average fixed and variable tariff over the entire term of the power purchase agreement.
Under the National Solar Mission (NSM), NTPC is entrusted with the responsibility of roping in third-party developers for developing solar power capacity of 15,000 MW by 2022. The French company’s plant in Kadapa is part of this mandate under which the power major has already completed 3,000 MW across the country.
Besides, NTPC aims to develop 10,000 MW solar power on its own, taking the total solar power under its management to 25,000 MW, a fourth of 1 lakh MW to be developed under NSM in the country by 2022.
NTPC is in the process of developing a 1,000-MW solar power project in AP’. It commissioned 250 MW plant in the first phase.
The drop in prices of solar panels is hammering down solar power tariff as well. The better structuring of the project reduces risk for developers and better currency hedging deals that make financing available at competitive cost. The highest average tariff was recorded at Rs12.16 a unit, when the first 150 MW of solar power project was tendered under the National Solar Mission (NSM) in 2010.
Since then, tariff has been on downward path almost in line with Chinese spot module prices, which fell by 80 percent since 2010, according to Mercom Communications India, a clean energy intelligence provider.
Also, many pension and sovereign wealth funds looking for not very high, but stable and long-term returns are willing to finance clean energy projects in India.
