New low price for Indian solar

First Solar may have set the bar for the world’s cheapest solar in Nevada – with more than a little help from Warren Buffett-owned utility NV Energy – but the U.S. thin-film giant lost out on price to a Canadian rival which set a new low price for Indian solar.

Ontario-based SkyPower announced on Thursday it had won 150 MW of solar capacity in an auction in Madhya Pradesh and two days later, the solarlove.org website revealed the price agreed had set a new record for the nation.

According to solarlove, SkyPower’s Mauritius-based subsidiary SkyPower Southeast Asia Holdings has agreed a price of INR5.051-5.298/kWh ($0.08/kWh) and First Solar was among the competitors to lose out in the 300 MW tender, which prompted bids for 3.7 GW of capacity.

The end for Indian solar subisidies?

The SkyPower price exceeds the $0.0585/kWh agreed by Saudi state-backed utility DEWA in Dubai as well as the $0.0387/kWh negotiated by NV Energy in Nevada but the new benchmark will reinforce the desire of the Indian government to reduce or remove solar power subsidies.

Narendra Modi’s government is planning to hold further auctions this year with a viability funding gap element to the tender – a government grant used to bridge the gap between capital costs and the expected return from electricity customers, which is used to make commercially viable long-term infrastructure projects more attractive to investors.

According to the solarlove report, SkyPower wants to install 9.9 GW of solar in the next five to seven years and the company announcement of the latest tender win revealed the Canadian company will soon launch an India Solar Fund for investors.