Winning bids for 500 MW of solar PV in the Indian state of Andhra Pradesh will close at INR 5.37/kWh ($0.08/kWh) or below in the second round of the National Solar Mission (NSM), reports Bridge to India.
First round bid results revealed that 28 developers were selected to move to the second round of bidding, with the highest qualifying bid of that round coming in at INR 6.01/kWh ($0.09/kWh) and the lowest just INR 5.21/kWh quoted by Trina Solar.
There is more than 5 GW of solar PV capacity in Andhra Pradesh up for grabs under the current NSM round. Only three bids will be subscribed under this initial 500 MW tranche, Bridge to India says, meaning that the winning bids will all definitely be priced below INR 5.37/kWh.
The analysts added that cost-adjusted maximum tariffs could have been set as low as INR 5.11/kWh, but the requirement for these projects to be inside a solar park increased the prices slightly.
The lowest bid by Trina Solar was followed by First Solar at INR 5.35/kWh, SunEdison at INR 5.37/kWh, Energon at INR 5.39/kWh and Renew Power at INR 5.39/kWh. Tata Power joined a handful of other developers able to quote tariffs below INR 5.50/kWh.
Some of the more prominent bidders in the tender that at this stage decided not to go below INR 5.50/kWh included SkyPower (who bid at INR 5.94/kWh), SoftBank (who bid at INR 5.65/kWh) and Azure, with a bid of INR 5.73/kWh.
According to Bridge to India, tariffs bid for at prices below INR 5.25/kWh move into the realm of being "unattractive investments", and most of the bidders in rounds one and two will end up being unsuccessful due to the capacity on offer being much lower than the interest shown. Future bids as low as INR 5.00/kWh could be seen in the states of Rajasthan and Karnataka, however.
Another school of thought, suggest the analysts, is that tariffs in India are already at an unsustainable level but this being the first NSM tender for a long time competition is fierce as companies jostle for pole position in what remains an attractive solar market.
In August Madhya Pradesh began selling PV power at Indias lowest rate INR 5.051/kWh ($0.08/kWh), besting the previous lowest price set in Telangana by SkyPower, which secured a winning bid of INR 5.17/kWh ($0.08/kWh).
This content is protected by copyright and may not be reused. If you want to cooperate with us and would like to reuse some of our content, please contact: email@example.com.