Between August 2013 and now, the prices of solar panels have fallen precipitously, from around 60 US cents a watt to a third of it. Yet, the prices of projects for solar home lighting systems have risen sharply. Why is this so, wonders the National Solar Energy Federation of India.

In a recent letter to Dheeraj Kumar, Principal Secretary to the Government of Tamil Nadu, the Federation has sought to draw his attention to the “exorbitant prices revealed upon recent opening of a few financial bids against a tender of the District Rural Development Agency, for providing solar home lighting systems, under the Chief Minister’s Solar Powered Greenhouse Scheme.

The letter notes that when a tender floated for similar work by another agency of the State government, the Tamil Nadu Energy Development Agency (TEDA), in August 2013, the lowest prices offered was ₹18,500 per system. In contrast, in a tender for providing solar lighting to 60,000 rural households in 20 districts of the State, floated in August, the best price offered was ₹29,877 per system – even though the prices of solar panels and LED bulbs have fallen substantially between 2013 and now.

“You may please like to get the matter examined through the projects directors in different districts in order to ensure fairness in the evaluation process,” says RK Sharma, Honarary Secretary, NSEFI, in the letter. The federation is a not-for-profit body representing solar energy companies.

A solar company that Business Line spoke to alleged that bidders were “under pressure” to bid higher, implying kickbacks.

Furthermore, the federation points out that the prices discovered through the recent tender are also more than the benchmark prices for such projects, fixed by the Ministry of New and Renewable Energy.

“The benchmark prices of the MNRE are recommended after much research and should not be ignored while deciding the orders for the solar systems,” the federation’s letter says, requesting Dheeraj Kumar to “please look into the matter for corrective action.”