Photo voltaic power tariffs drop to file highs as prices rise

India’s solar energy tariffs are beginning to rebound from file lows final December, boosted by components corresponding to rising commodity costs and an increase in the price of imported photo voltaic gear from the yr subsequent, mentioned two individuals accustomed to the issue.

Latest auctions have proven that builders bear in mind comparatively decrease photo voltaic radiation in some areas when submitting their bids. Decrease photo voltaic radiation will increase the price of producing electrical energy. As well as, rising commodity prices and a base tariff of 40% on photo voltaic modules and 25% on photo voltaic cells that can be imposed from April 2022 affect the hotly contested public sale rounds. , builders calibrating these new realities whereas inserting bids.

For instance, the 550 megawatt (MW) Agar photo voltaic farm public sale referred to as by Rewa Extremely Mega Photo voltaic Ltd (RUMSL), a three way partnership between Photo voltaic Vitality Corp. of India (SECI) and Madhya Pradesh UrjaVikas Nigam Ltd, noticed profitable bids for 2.44 per kWh for 350 MW and 2.45 per kWh for 200 MW quoted by O2 Energy Pvt. Ltd and Avaada Vitality Pvt. Ltd, respectively.

As well as, an public sale referred to as by Maharashtra State Electrical energy Distribution Co. Ltd (MSEDCL) for 500 MW resulted in bids for 2.42 per kWh for 300MW and 2.43 per kWh for 200 MW by Acme Photo voltaic Holdings Ltd and ReNew Energy Ventures Pvt. Ltd, respectively.

The development continued for tenders for 450 MW at RUMSL’s Shajapur photo voltaic farm, the place profitable bids from 2.35 per unit for 105MW and 2.33 per kWh for 220 MW had been cited by the state-owned NTPC Renewable Vitality Ltd. As well as, SolarArise India Initiatives Pvt. Submission Ltd. 2.33 per kWh to land a 125 MW contract.

The provides are a part of one of many largest 9 gigawatt (GW) slices of fresh power contracts at the moment on supply. These contracts, representing an funding of greater than $ 4 billion, are supplied after an extended lull and relate to the meeting of photo voltaic, hybrid and wind tasks, as reported. mint earlier. Whereas the 6.68 GW capability is auctioned by SECI, MSEDCL and RUMSL are bidding for contracts for 1 GW and 1.5 GW, respectively.

Trade specialists predict that costs will stay agency any further.

“As costs agency up, yields are secure. Present provides in Maharashtra and Madhya Pradesh mirror that after you allow areas wealthy in photo voltaic radiation corresponding to Fatehgarh, the charges supplied by builders enhance attributable to decrease radiation depth. As well as, commodity costs reaching an all time excessive had an impression on the price of buildings and different BO (system stability) components, ”mentioned Peeyush Mohit, COO at O2 Energy Pvt. Ltd.

A excessive photo voltaic module value of 25 cents per kWh might not solely cut back yields from bidding tasks by 200 foundation factors, however can also enhance solar energy tariffs by 10 to fifteen paise per unit in future bids. , Crisil Rankings mentioned in a current assertion.. Photo voltaic power tariffs in India hit a file excessive of 1.99 per unit in December 2020 at public sale performed by Gujarat Urja Vikas Nigam Ltd. “Together with these components, the federal government issued notification of primary tariffs on photo voltaic modules and cells can also be mirrored within the not too long ago quoted tariffs,” Mohit mentioned. of O2 Energy which is backed by Temasek Holdings of Singapore and Stockholm-based various asset supervisor EQT Companions.

The resumption of photo voltaic tariffs is gaining in significance as India runs the world’s largest clear power program. India, which has a photo voltaic technology capability of 41.09 GW, plans to extend it to 100 GW subsequent yr. In the meantime, the home manufacturing capability is simply 3 GW for photo voltaic cells and 15 GW for photo voltaic modules. “The current enhance in photo voltaic tariffs is a mirrored image of the rise in tariffs that may take impact in April. That is most likely the brand new normal for photo voltaic tariffs because the period of low cost imports involves an finish. Whereas it will result in elevated electrical energy tariffs for shoppers, it helps firms manufacture photo voltaic modules as a part of the Make in India initiative, ”mentioned Sanjeev Aggarwal, Founder and CEO of Amplus , owned by Malaysian oil and fuel firm Petroliam. Nasional Bhd.

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