Deep pockets, assured offtake and possibly a new technology for deployment may have brought down solar power tariffs to record lows in the latest auctions. These bids were called by the Solar Energy Corporation of India (SECI) for developing 1,070 MW of solar power generation capacity by domestic and foreign project developers.

Aljomaih Energy & Water Company and Green Infra Wind Energy Limited have set a new record by offering to sell solar power at ₹2 a unit.

Both these will be generating power from grid-connected solar photovoltaic power projects that are to be set up in Rajasthan.

According to the SECI tender documents, Rajasthan Urja Vikas Nigam Limited (RUVNL) will be the buying entity for power generated from these projects. This will help bring down costs by de-risking, as some earlier projects could not find buyers despite offering a competitive tariff.

Overseas players

Another striking feature of the bid results is that both companies that have quoted the lowest tariffs are part of large multinational groups based outside of India. Aljomaih Energy & Water Company is a private Saudi Arabia-based company is the first utility scale project that they have won in India.

Green Infra Wind Energy Limited (GIWEL) is promoted and owned by Sembcorp Green Infra Limited (SGIL), which is a part of Singapore-headquartered Sembcorp Industries. Sembcorp also holds the record for quoting the lowest wind energy tariff at ₹2.44 a unit.

The new bids are significantly lesser than the previously record low tariffs discovered in SECI bid rounds that were discovered earlier this year.

The previous record low solar bid stood at ₹2.36 a unit. It was quoted by Spain-based Solarpack, another multinational, to set up a 300-MW generation capacity during a SECI tender in June.

This allows easier access to foreign capital for developing projects. If done right, the option of overseas borrowings can significantly lower finance costs.

Aljomaih Energy & Water Company will be setting up a 200-MW solar power project at this tariff while Sembcorp has bid to set up a 400-MW generation capacity project. The next lowest bid in this tender has come from NTPC Limited that has quoted ₹2.01 a unit for setting up a 600-MW generation capacity. It is expected that NTPC will be awarded 470 MW of solar power generation capacity.

Modules & trackers

According to Mohit Kumar of DAM Capital Advisors Ltd, developers are looking to deploy bifacial modules and single axis trackers in the projects that have been awarded in this round.

“Majority of current PV installations employ monofacial crystalline silicon PV modules with a fixed-tilt system setup. Researchers from the Solar Energy Research Institute of Singapore have concluded that utility-scale PV projects relying on bifacial panels and single-axis trackers deliver the lowest levelised cost of energy. They found that the combination of bifacial products with dual-axis trackers is still too expensive, despite the higher yield,” Kumar said.

These bifacial modules will be collecting light from both front and rear sides of the panel. Manufacturers claim bifacial modules provide up to 30 per cent more energy than conventional panels in optimal locations with high reflectivity; depending on the design and layout.

This approach significantly brings down land acquisition costs for project developers.