Price of solar power may fall further in FY18 in India

Solar power generation costs are set to dip further during the third and fourth quarter of 2017-18, helped by expected softening of interest rates and a drop in solar panel prices due to a supply glut in the international market, analysts say.

Solar power costs had hit a low of Rs 3.30 per unit last month, which is equal to average generation tariffs of NTPCBSE -0.76 %, which produces the bulk of its power from coal.

NTPC’s lowest cost of generation from one of its old plant is around Rs 1.80 per unit, but on an average solar power, prices are expected to become significantly lower than thermal power as solar generation prices fall further.

“Interest rates are expected to soften this year thus bringing down the cost of generation of solar power plants. This would thus bring down generation tariffs further from the new low achieved in February,” said Sabyasachi Majumdar, senior vice president at ICRA.

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