Distribution companies want to rework pacts as solar tariffs hit new low

NEW DELHI: Solar tariffs have fallen so dramatically that tariffs which were at record lows just three months ago no longer appeal to distribution companies, creating a big challenge for renewable energy companies. In April, French solar developer SolaireDirect won 250 MW in an NTPC conducted auction at Kadapah Solar Park in Andhra Pradesh, quoting a tariff of Rs 3.15 per kwH.

At the time, this was a record low, beating the previous record of an average tariff of Rs 3.30 per kwH set in the auction conducted at Rewa Solar Park in Madhya Pradesh in February. But with tariffs having dropped even further, reaching an all-time low of Rs 2.44 per kwH at an auction conducted in May by Solar Energy Corporation of India (SECI) at a solar park in Rajasthan, Andhra Pradesh has made it clear to NTPC that it does not want solar power at Rs 3.15 per kwH, a tariff it now believes is too high. NTPC is left with the unenviable task of finding a new buyer.

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