The recent tender floated by Madhya Pradesh Urja Vikas Nigam Limited (MPUVNL) for the development of 35 MW of grid-connected rooftop solar under RESCO model saw bids as low as ₹ 1.58 (~$ 0.022)/kWh for Power Grid Corporation of India (PGCIL), a central government PSU. This is the lowest tariff discovered in the country so far.

However, though the tariffs look extremely low, the caveat here is that the first year tariffs quoted in this auction are set to escalate by 3 percent per year over a period of 25 years.

Mercom reported only recently that MPUVNL RESCO tender had witnessed the participation of 31 developers. The 35+ MWp rooftop tender capacity was oversubscribed by more than 630 percent.

Under this tender, 291 government colleges, 159 police establishments, municipal corporations, private entities are covered.

Among all the state government buildings, the lowest rate of ₹1.69 (~$0.024)/kWh has been discovered for municipal bodies.

Tariff for medical colleges is at ₹1.74(~$0.025) kWh, which is about one-fourth of what they are currently paying. Police establishments will get power at ₹2.33 (~$ 0.033)/kWh. All government engineering colleges and polytechnics would get power at ₹2.35 (~$0.033)/kWh. The lowest rate amongst private institutions has been ₹2.28 (~$0.032)/kWh.

Earlier, Mercom had reported that amid the uncertainty regarding the imposition of safeguard duty, the MPUVNL came up with a clarification for its latest solar rooftop RESCO tender proactively.

In its clarification, MPUVL had considered using a 100kW system. According to MPUVNL, “This adjustment in tariff because of change in capital cost will be given until three months prior to the scheduled commissioning date of the project as provided in the PPA.”

Per the clauses of the request for proposal (RfP) and the power purchase agreement (PPA), in case safeguard duty is levied on imported cells after the bid submission day, which is August 23, 2018, the tariff would be adjusted with a specified formula. MPUVNL had issued a clarification that 25 percent duty on cells would lead to a tariff adjustment (increase) by 5.2 percent.

Nitin is a staff reporter at Mercomindia.com and writes on renewable energy and related sectors. Prior to Mercom, Nitin has worked for CNN IBN, India News, Agricultural Spectrum and Bureaucracy Today. He received his bachelor’s degree in Journalism & Communication from Manipal Institute of Communication at Manipal University and Master’s degree in International Relations from Jindal School of International Affairs. More articles from Nitin Kabeer