Tariffs below INR2.55/kWh ($0.034) are not financially viable in the Indian solar sector under current market conditions, according to research by the U.S.-based Institute for Energy Economics and Financial Analysis (Ieefa) and JMK Research & Analytics.
The researchers concluded India’s solar tariffs have stabilized at INR2.50-2.87/kWh – some 20-30% below the cost of existing thermal power facilities in India, and up to half the price of new coal-fired capacity.
“While this rate is very competitive compared to thermal plant tariffs, and lucrative for power distribution companies entering long-term power purchase agreements, this is a floor for developers if they want to make money,” said study co-author Vibhuti Garg, an Ieefa energy economist.
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