India’s solar industry is extremely price-sensitive, where the difference of a single penny can make a difference. Over 16 GW of solar projects were auctioned in 2019, and the lowest discovered tariff in these auctions was ₹2.48 (~$0.0329)/kWh a 1.6% increase compared to the lowest tariff in 2018 of ₹2.44 (~$0.0324)/kWh. Since the imposition of safeguard duty in July 2018, the lowest tariffs have trended upward.

Four bidders quoted the lowest tariff of 2019 in the first phase of the Solar Energy Corporation of India’s (SECI) 750 MW solar tender for projects in the state of Rajasthan.

The tender, originally floated in August 2018, was oversubscribed and received bids for over 2.3 GW from interested bidders. The upper tariff ceiling was ₹2.68 (~$0.0356)/kWh for this auction. This project received the two lowest bids during the year.

The lowest tariff of ₹2.48 (~$0.0329)/kWh was quoted by Fortum Solar, Acme Solar, UPC Renewables, and LNB Group for this project. Fortum Solar and Acme Solar were awarded 250 MW of projects each, while UPC Renewables and LNB Group were awarded 100 MW and 40 MW, respectively.


Lowest Solar Tariff in 2019

In the same auction, ReNew power quoted the second-lowest tariff during the year at ₹2.49 (~$0.0331)/kWh to develop 360 MW. However, they were awarded only 110 MW due to the bucket-filling method applied to the awarded capacities in reverse auctions.

2nd Lowest Solar Tariff in 2019

The third lowest tariff of ₹2.50 (~$0.0332)/kWh was quoted by Hero Future Energies, Mahindra Susten, and NTPC Limited under the second phase of SECI’s tender for 750 MW of solar projects in Rajasthan. The companies were awarded 250 MW, 200 MW, and 160 MW of projects, respectively.

3rd Lowest Solar Tariff in 2019

The fourth-lowest tariff during the year, ₹2.53 (~$0.0336)/kWh, was discovered during the auction for SECI’s tender for 1,200 MW of solar projects under interstate transmission system V (ISTS-V). GRT Jewellers won 150 MW of projects. In the same auction, 330 MW was allocated to SB Energy at a tariff of ₹2.65 (~$0.0352)/kWh. This tender had been undersubscribed by 50%, receiving bids for only 600 MW of solar capacity. Developers had then told Mercom that most large players were struggling with cash flows, and the Andhra Pradesh fiasco also had hurt the developer sentiment. Most importantly, developers were unhappy with the tariff caps.

4th Lowest Solar Tariff in 2019

Finally, the fifth-lowest tariff of ₹2.54 (~$0.0337)/kWh was quoted during the auction of SECI’s 1.2 GW solar PV projects to be connected to the designated ISTS network in Madhya Pradesh (ISTS-VI). This price was quoted by Ayana Renewables, ReNew Power, Azure Power, and Mahindra Susten. The first three companies were awarded 300 MW each, while Mahindra won 250 MW of solar projects.

5th Lowest Solar Tariff in 2019

In 2018, over 13 GW of solar capacity was auctioned during the year with the lowest discovered tariff in these auctions recorded at ₹2.44 (~$0.0324)/kWh, which has quoted four times in 2018 and was the lowest solar tariff the country had seen since 2017.

Mercom has previously reported on how tariff caps have been slowing down auction activity in the sector. Developers have denied bidding at the tariff levels specified by state agencies instead of a market-based auction, where the lowest bid wins. This has been the reason for most tender deadlines to be extended or retendered after raising the upper tariff ceiling. This trend of tender extensions and retenders has also led to a delay in auction activity.

In March, the Ministry for New and Renewable Energy said that upper ceiling tariffs or tariff caps would no longer be prescribed in future bids.

For a complete analysis of tenders, auctions and tariffs subscribe to Mercom India Quarterly Update report. To receive alerts for tenders and track every tender as it is announced, get Mercom’s India Solar Tender Tracker.