Solar tariffs hit a record low of ₹2.97 per unit on Friday following the completion of the bid for three 250 MW units of Madhya Pradesh’s Rewa Solar Power Plant, continuing the steady downward trend in prices.
Mahindra Renewables won Unit 1 at a price of ₹2.979 per unit, ACME won Unit 2 at ₹2.970 per unit and Solenberg Power won Unit 3 at ₹ 2.974 per unit.
“India marches on towards realising the clean energy vision of PM Narendra Modi. First year solar tariff bids at record low of ₹ 2.97/unit,” tweeted Piyush Goyal, Minister of New and Renewable Energy, following the completion of the auction.
Risk to viability
However, while low tariffs are good news for consumers, experts believe that this may spell trouble for the industry as a whole since projects will start becoming unviable at such low tariffs.
“The problem right now is that there is so much inventory with our neighbouring country that they are selling them to Indian companies at very low prices. If this continues, then prices can fall even further,” Jaideep Malaviya, Secretary General of the Solar Thermal Federation of India told The Hindu.
“I don’t think new companies or entrepreneurs will be incentivised to enter the market at these prices,” he said. “It is already unviable.”