Rajasthan’s tender for purchase of solar power has turned up the lowest ever tariff offered for selling electricity generated by solar plants.

Essel Mining, which wants to put up a 10 MW solar photo voltaic plant and supply the power to Rajasthan Renewable Energy Corporation, has quoted Rs 6.45 a kWhr.

(Although, in a similar tender in Tamil Nadu a bidder (Mohan Breweries) had quoted Rs 5.97 a unit, Tamil Nadu’s tender has a 5 per cent annual escalation for 10 years.)

Rajasthan’s tender for purchase of solar power from 100 MW of capacity has attracted 23 qualified bidders with total bid capacity of 185 MW. The highest rate quoted is Rs 8.25 a KWhr. Seventeen of the bidders have quoted rates less than Rs 8, and 12 of them Rs 7.50 or below. Four bidders have offered to sell solar-generated electricity at rates of Rs 7 or below.

However, the bidders will be asked to match the lowest price (L-1, which is Rs 6.45). “Since the allocation of projects will be based on the L1 quoted tariff, the big question will be how many of the bidders will accept the L1 rate,” says Madhavan Nampoothiri, Director, RESolve Energy Consultants.

Solar power tariff has been plummeting, from an average rate of Rs 12.16 a unit for 140 MW under the National Solar Mission Batch I bidding, to Rs 8.77 a unit for 340 MW in Batch II to further lower levels in various State tenders.

However, experts note that the era of cheap solar power may be coming to an end. This is because of the likelihood of an anti-dumping duty on imported Chinese and American solar modules and cells. Secondly, China itself is moving towards an anti-dumping duty on polysilicon — a key raw material — imported from the US. Furthermore, China itself is coming out with a huge solar power programme, over 10,000 MW. All these could cause hardening of prices. Indian solar power developers may not be able to access the equipment needed to generate solar power so cheap in the near future.

ramesh.m@thehindu.co.in

(This article was published on February 13, 2013)
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