In the state of Rajasthan, 750 MW of solar has been tendered by the Solar Energy Corporation of India (SECI) at a low benchmark price of Rs.3.93 (~$0.0590)/kWh compared to the previous benchmark price of Rs.4.43 (~0.0665)/kWh. The developers will be bidding for additional viability gap funding (VGF) in addition to the tariff and can also use other available incentives like accelerated depreciation (AD), concessional customs and excise duties. However, developers cannot claim VGF and AD simultaneously.

Solar capacity of 500 MW will be developed in Bhadla Phase-III Solar Park and 250 MW in Bhadla Phase-IV Solar Park under the National Solar Mission (NSM) Phase II, Batch IV. The auction winners will be based on the lowest bid price using VGF. Once developed, the Bhadla Solar Park will have an aggregate capacity of 2,255 MW.

An official at the Ministry of New and Renewable Energy (MNRE) commented, “Rajasthan is a trendsetter in India’s solar sector. Previously, the lowest tariff was Rs.4.34 (~$0.0651)/kWh in the state.” The official also added that looking at the current competitive environment in the sector, it is expected that the tariffs in all states will go down. However, this is not a direct comparison as the developers will be bidding for the lowest VGF amount in addition to the Rs.3.93 (~$0.0590)/kWh tariff.

Mercom’s source at SECI said, “the new tariff will be a relief for distribution companies (DISCOMs) in the state as they will have cheaper power available. The state has previously witnessed curtailment of solar and the new low tariff will give a boost to both the developers and DISCOMs.”

Solar power tariffs have been revised for 5,000 MW of VGF projects under National Solar Mission (NSM) Batch-IV, Phase-II. Mercom’s source at the MNRE confirmed that the Ministry has started implementing the tariff revision starting with the current batch of projects. States such as Rajasthan, where the tariff has previously been below Rs.4.50 (~$0.0675)/kWh will have a revised tariff of Rs.4 (~$0.060)/kWh (SECI takes a trading margin of Rs.0.07 (~$0.001)) and states where the tariff was above Rs.4.50 (~$0.0675)/kWh will have a revised tariff of Rs.4.50 (~$0.0675)/kWh.

According to Mercom’s India Solar Project Tracker, under the VGF program, SECI has tendered 4,525 MW of solar PV out of which power purchase agreements (PPAs) have been signed for 2,528 MW to date.

Sampath has been part of the Mercom India research and news team since the company’s inception. He currently oversees all data and research relating to news published on the MercomIndia.com platform. Sampath received his Bachelor’s of Commerce Degree from Kuvempu University and Post Graduate Diploma in Management, from Indira Gandhi National Open University. More articles from Sampath Krishna.