Solar power tariff hits a new low of Rs4.34 per unit

Solar power tariffs in India have fallen to an unprecedented low of Rs4.34 / kWhr through reverse auction for one of six projects of 70 MW each to be put up in Rajasthan under the National Solar Mission.

Finland-based energy firm Fortum Finnsurya Energy quoted the lowest rate of Rs4.34 a unit to bag the contract for setting up a 70-MW solar plant under NTPC's Bhadla Solar Park tender, pushing down solar power tariff to an all-time low.

NTPC on Monday conducted the reverse bidding for 420 MW solar power projects to be set up in the Bhadla Solar Park-II, near Jodhpur in Rajasthan.

Piyush Goyal, union minister of state (independent charge) for power, coal and new and renewable energy congratulated chief minister of Rajasthan Vasundhra Raje for the success.

''Congratulations to Hon'ble Raj CM @VasundharaBJP ji for achieving lowest ever Indian solar tariff of Rs. 4.34/ unit through reverse auction,'' he tweeted.

Solar power tariffs had touched a low of Rs4.63 per unit in November last year, following aggressive bidding by the US-based SunEdison, the world's biggest developer of renewable energy power plants.

This, according to NTPC, has happened because of confidence in NTPC and market confidence in solar parks, reports quoted New and Renewable Energy (MNRE) joint secretary Tarun Kapoor as saying.

NTPC has so far bid out 420 MW in six blocks of 70 MW each, Kapoor said.

The other winners included Rising Sun Energy Pvt Ltd (two blocks for Rs4.35 a unit), Solairedirect (two blocks for Rs4.35 a unit) and Yarrow Infrastructure (one block for Rs4.36), Kapoor said.

"We understand that we are among the successful bidders in the e-reverse auction process conducted by NTPC for the selection of grid connected solar PV projects... in Bhadla Solar Park Phase II in Rajasthan for 70 mw," Fortum India MD Sanjay Aggarwal said in a statement.

"Based on the general procedure, a letter of intent (LoI) shall be issued within 15 days from the completion of the reverse auction and PPA shall be signed within 30 days after the LoI is issued. Hence, Fortum will be in a position to disclose more details once the company signs the PPA with a relevant authority in India."

SunEdison had won a bid to sell solar power from a 500 megawatt plant in Andhra Pradesh under the Jawaharlal Nehru National Solar Mission at Rs4.63 per kilowatt-hour (kWh or unit) – a tariff lower than the rates offered by SoftBank Group Corp of Japan and Chinese solar product maker Trina Solar Ltd in the auction.