Solar power tariff falls further to Rs2.44 per unit

India's solar power tariff hit a new low of Rs2.44 per unit on Friday, with companies bidding aggressively for the remaining 500 MW capacity on offer at Bhadla Park in Rajasthan.

On Wednesday's bidding for the first 250 MW capacity, tariffs quoted had fallen to Rs2.62 per unit, after companies vied for a decreasing quota of new solar power capacity on offer.

In the auction conducted by state-run Solar Energy Corporation of India (SECI), Acme Solar Holdings Pvt Ltd and SBG Cleantech placed winning bids of Rs2.44 per kilo-watt hour (kWh) and Rs2.45 per kWh, respectively, to win contracts for the solar park being developed by Infrastructure Leasing and Financial Services Ltd.

While Acme Solar will develop 200MW, SBG Cleantech, a three-way joint venture of Bharti Enterprises Ltd, Japan's SoftBank Group and Taiwan-based Foxconn Technology Group will set up the balance 300MW at the solar park.

''Green future: Latest Solar power auction at Bhadla Solar Park 3 sets new record with electricity tariff of Rs 2.44/unit,'' Piyush Goyal, minister for new and renewable energy, power, mines and coal, said in a tweet.

While this may not set a benchmark for power tariff in India, it will at lease set the stage for a tariff correction for electricity from other fuel sources to stay relevant in the country's energy mix.

The cheapest power available from conventional sources, coal-based power generated by India's top utility NTPC Ltd costs Rs3.20 per unit.

Interestingly, other bidders including Hero Solar Energy and ReNew Solar Power also placed aggressive bids of Rs2.46 per kWh and Rs2.47 per kWh, respectively, for the Bhadla project.

Another clean power producer Avaada Power placed a bid of Rs2.60 per kWh.

Other bidders included Shapoorji Pallonji Infrastructure Capital, Rattan India Solar, Duroc Solar, Orange Renewable, UK's Lightsource Renewable, France's Solairedirect, Mahoba Solar and Aditya Birla Renewables.

The tender saw 24 bids totalling 5,500MW for the 500MW capacity on offer. SECI shortlisted 13 of them and set the reserve price at Rs3.01 a unit before the reverse auction began on Thursday afternoon.