According to a report by Mercom, IndiaÂ’s solar sector recently reached record low tariff levels in the auction conducted at the Rewa Solar Park in the state of Madhya Pradesh. India was one of the first countries to adopt reverse auctions for solar projects since the inception of its national solar policy and the governmentÂ’s goal has always been to procure solar power at the lowest price possible.
The recent record low bid of Rs 3.30 (~$0.494)/kWh (levelised over 25 years) at the Rewa Solar Park by ACME was lower by Rs 1.05 (~$0.02) and 24 per cent compared to the previous low of Rs 4.35 (~$0.07) quoted in Rajasthan (by Fortum) in July 2016.
When the first 150 MW of solar was tendered under the National Solar Mission (NSM) Batch-I in 2010, the average tariff quoted was Rs 12.16 (~$0.17)/kWh. Average tariffs have fallen by about 73 per cent since 2010, almost in line with Chinese spot module prices, which have fallen by approximately 80 per cent since 2010, says Mercom.
The entire global solar market was about 17 GW in 2010; Indian solar installations at that point were only about 18 MW. When NSM was initially rolled out, neither the government agencies nor developers had much experience installing solar power projects, nor was there a supply chain in existence. With subsequent auctions, intense competition to get into a new sector resulted in aggressive bidding leading to continued drops in tariffs.
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