Structural factors driving down PV prices in India


From pv magazine India

An India Ratings and Research (Ind-Ra) report attributes the continuous decline in Indian solar power tariffs since the start of FY2020-21 to a mix of structural and state-specific factors. 

Solar power tariffs declined to INR2.36/kWh ($0.032/kWh) in June-July 2020 and further to INR2.0/kWh in November 2020. Even the highest bid of INR2.43/kWh in the November auction was lower than the tariffs seen earlier. 

Ind-Ra stated that the decline in tariffs is being driven by a lower capital cost per megawatt of around INR40million/MW due to advanced panel designs enabling a higher capacity utilization factor (CUF), a reduction in panel costs globally, and lower financing costs. 

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State-specific factors impacting the tariffs in the latest round include an exemption of INR0.2 million/MW of cess levied by the Rajasthan government on project development in the state. The exemption could translate to savings of 10-12 paise/kWh as the offtake is for the Rajasthan Urja Vikas Nigam Ltd state power trading company. Safeguard duty exemption on panel imports is another factor driving cost reduction, according to the rating agency.

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