India looks to limit maximum tariff bid to INR 2.50 per unit

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India is planning to implement a major shift in the way job developers will participate in future solar energy tenders. The Ministry of both New and renewable energy has proposed to decrease the maximum permitted tariff bid in at least the national level solar energy tenders.

According to media reports, the Ministry has issued a letter to Solar Energy Corporation of India with a direction to decrease the maximum permitted Tariff offer of Rs 2.93/kWh to Rs 2.50/kWh. The proposed limit will be exclusive of the monetary impact of safeguard duty lately imposed on solar cells that are imported. With the addition of the safeguard duty obligation, the most tariff bid permitted will be Rs 2.68/kWh.

The latest national level solar energy auction conducted by NTPC Limited saw tariffs in accord With the suggestions of the Ministry. NTPC allocated 1.2 gigawatts in the bidding range of Rs 2.592.60/kWh. These bids were inclusive of shield duty impact.

The directive comes weeks following SECI canceled award of 2.4 gigawatts of solar energy capacity to several job developers in India's largest solar ever energy tender. The smallest offer submitted in this offer was made by Acme Solar at Rs 2.44/kWh for 600 megawatts of capacity. The 2nd lowest bid was set by Azure Power and Adani Green Energy at Rs 2.64/kWh, an increase of more than 8 percent, whilst the highest bid was set by SB Energy at Rs 2.71/kWh for 1.1 gigawatt of capacity. Only Acme Solar was awarded the right to develop jobs while the other bids were rejected despite being well beneath the maximum threshold of Rs 2.93/kWh.

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