Solar tariffs have fallen to an unprecedented low of ₹4.34 a kWhr. Finnish company Fortum Finnsurya Energy has quoted that tariff to bag mandate to set up a 70-MW solar plant under NTPC’s Bhadla Solar Park tender.

NTPC bid out 420 MW under ‘batch II, tranche-I of the second phase of the National Solar Mission’, in six blocks of 70 MW each.

The other winners were Rising Sun Energy Pvt Ltd (two blocks for ₹4.35 a kWhr), Solairedirect (two blocks for ₹4.35) and Yarrow Infrastructure (one block for ₹4.36).

Thirteen of the 22 bidders quoted tariffs less than ₹5, with the bidder ranked 13, Suraksha Realty, quoting ₹4.89.

ACME Solar and Hero Future Energy, which quoted ₹4.40 and ₹4.44 respectively, came closest to the winning bids.

In November, American renewable energy giant SunEdison made news by winning solar projects in Andhra Pradesh, offering to sell power at ₹4.63 a kWhr, a new low then.

Solar tariff falling to ₹4.34, may be good news for the buyers of solar power such as NTPC, but many in the industry are shocked.

Wind industry unhappy The wind industry is not happy too as state governments have been preferring cheaper solar power over wind. Madhusudhan Khemka, Chairman, Indian Wind Turbine Manufacturers’ Association, said it was a “disturbing trend”.

Gaurav Sood, Managing Director of Solairedirect, part of French energy major Engie, said that the company’s winning tariff of ₹4.35 (for 140 MW) was a “combination of factors” such as irradiation, infrastructure costs at that location, credibility of the off-taker (NTPC), and the economies of scale in putting up a large project in one location.

Dissenting voices Sunil Jain, CEO and Executive Director, Hero Future Energies, said that given better sunshine in Rajasthan and a more favourable cost structure, a tariff of ₹4.45 there was equivalent of ₹5.08 in Gani, Andhra Pradesh, where SunEdison won a project quoting ₹4.63 in November 2015.

However, Bikesh Ogra, President, Sterling & Wilson, India’s largest solar EPC company, said that capacity utilisation factor levels in Bhadla, Rajasthan, were “not materially higher” than in Gani.

Besides, most of the six blocks at Bhadla, he said, were located on sandy sites, where the dunes often shift.

This necessitates deeper foundation, adding to costs.

“It looks like tariffs are being influenced by something beyond these ground realities,” said Ogra.

UB Reddy, Managing Director, Enerfra Projects, a wind company, called for standards for solar panels just there are for wind turbines.