Solar tariffs in India have fallen by 73 per cent since 2010

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Intense competition in reverse auctions due to a limited supply of projects has pushed companies to bid lower to gain market share at the cost of margins. India’s solar sector recently reached record low tariff levels in the auction conducted at the Rewa Solar Park in the state of Madhya Pradesh, according to a report by Mercom.

India was among the first countries to adopt reverse auctions for solar projects since the inception of its national solar policy.

The government’s goal has been to procure solar power at the lowest price possible. When the first 150 MW of solar was tendered under the National Solar Mission (NSM) Batch-I in 2010, the average tariff quoted was Rs.12.16 (~$0.17)/kWh.
Average tariffs have fallen by about 73% since 2010, almost in line with Chinese spot module prices, which have fallen by approximately 80% since 2010, Mercom said. In 2010, while the entire global solar market was about 17 GM, Indian solar installations were merely 18 MW.

Highly competitive reverse auctions, falling module and component prices, the introduction of solar parks, lower borrowing costs, and the entry of large power conglomerates with strong balance sheets and access to cheaper capital, according the Mercom, have contributed to the dramatic fall in bids.

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