It’s not just oil that is on a slide. While globally crude has slid some 70% in the last year and a half, solar power tariffs too have sunk to a new low in India at Rs 4.34 per unit — a third of the going rate a few years ago — for a project in Rajasthan.
The lowest solar tariff in the country was quoted by Fortum India for one of the six packets of 70MW each bid out by state-run generation utility NTPC for Rajasthan’s Bhadla solar park near Jodhpur. Rays Power Infra and Solar Direct won two packets each, while the quote from Indiabulls for the sixth project stood a tad higher at Rs 4.36 per unit.
The previous low stood at Rs 4.63 per unit offered by SunEdison and SB Energy for two projects of 500MW and 350MW respectively in Andhra Pradesh.
Fortum’s quote is lower than the price of power from several thermal power plants built by private firms and slightly higher than tariffs offered by yet others. But is is still nearly double that of NTPC’s tariff for thermal plants.
Understandably, an elated power, coal and new and renewable energy minister Piyush Goyal tweeted to congratulate chief minister Vasundhara Raje. The CM tweeted back to credit the PM’s vision and Goyal’s support for the feat.
At a ballpark figure of Rs 6 crore per MW cost, the entire 420MW project could take up an investment of Rs 2,520 crore.
The ever-declining solar power tariffs have also drawn cautionary notes from some industry players who have raised concerns over long-term sustainability. Industry tracker Mercom Capital Group recently said concerns were rising since project costs, including those of solar modules that take up half the investments, did not match the rate of decline in tariffs.
Sunil Bansal, secretary of Rajasthan Solar Association, said project cost would come down as economy of scale improved.