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Solar Tender a Day in India should see capacity doubling both in 2015 and 2016 making it the 4th largest market globally

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India to become 5th largest solar market in 2015

While a lot of things in infrastructure and business may not be going as per planned in the new Modi government, solar energy is running on all cylinders. Solar energy will in all probability reach around 2.5 GW in 2015 and increase to around 5 GW in 2016. This is due to numerous tenders issued by state governments, the central government (SECI) and state run utility NPTC. The capacity in these tenders total more than 10 GW, which will lead to the creation of a massive pipeline of projects. Private developers have shown a huge interest in these tenders with most of them seeing extremely high completion with low prices (Rs 5-6 /kWh). Most developers have bid for large capacities and are trying to develop a large scalable portfolio to reduce procurement costs. While the ROE may be low, the high growth is compensating these developers for the low prices they are bidding for.

solar panels india

Foreign developers and Private Equity backed developers are being the most aggressive in bidding for large capacities. Companies like ACME, Renew, SunEdison, Sky Power, Azure etc. have taken the lead in building large pipelines. One of the major competitive advantages for foreign players is the ability to source low interest loans from the international funds. Sky Power has been the lowest bidder in both the recent MP and Telangana tender, at around Rs 5/kWh surprising industry watches with the low bid. Note the typical interest rate in India is around 12%, which makes it hard to construct solar power projects at below Rs 6/kWh despite having very low equipment and construction costs.

The Indian government will try to further decrease costs by issuing tenders with tariffs to be denominated in foreign currencies such as dollar and yen. This will make the bids more competitive as the hedging cost of foreign loans will be taken by the government. This should lead to solar prices decreasing to the Rs 4-4.5/kWh range.

Also read Foreign Solar companies look at aggressively expanding in India.

At this rate, India will become the 4th largest market for solar energy by 2016 following China, USA and Japan. India is already set to become the 5th largest market in 2015 and will overtake Germany in 2016, since Germany is more or less saturated and is not looking to install more than 2-3 GW of solar energy every year.


Sneha Shah

I am Sneha, the Editor-in-chief for the Blog. We would be glad to receive suggestions, inputs & comments on GWI from you guys to keep it going! You can contact me for consultancy/trade inquires by writing an email to

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