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INR 5 or 7 cents becomes the new Indian Solar price norm after the Price Wars

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Indian Solar Price reaches INR 5/kWh

The whole world took notice when India solar auctions saw new low in prices of 6 cents, which was new low benchmark. This was especially surprising given the high cost of capital in India, which is around 12% for debt. Despite having record low global equipment cost, the high cost of finance implied that the solar tariffs could not be profitable at such a low level. However, sanity seems to be returning in the new solar auctions with such aggressive bids going away. While bids below INR 5 /kWh are still being seen in some cases where land and transmission is being provided, the INR 5 level has started to become the new normal. Most companies are bidding at this level in recent auctions, where tariffs/VGF is being provided.

A recent large 900 MW auction in India’s southern state of Karnataka saw bids at this level. Most of the winning bids were more or less in this range. One other characteristic of India’s solar energy space is the large number of players, who are ensuring sufficient competition and not allowing prices to go up too high. While the smaller states such as Chhattisgarh, Punjab and others are seeing lower number of bidders, the number of bidding entities in larger states are much more, since the comfort of payment is relatively higher and “managing the environment” risks are comparatively lower.

Note Karnataka also reduced its rooftop prices by 45% recently, to match returs with costs.

Karnataka Auction Results

  • Hero Solar Energy – 200MW (VGF INR6.8 million)
  • J K Petroenergy – 10MW (VGF INR7.5 million)
  • PCILPune – 40MW (VGF INR7.5 million)
  • Solitaire Powertech – 30MW (VGF INR7.5 million)
  • Energon Soleq Ravi India Power Resources – 100MW (VGF INR7.5 million)
  • Acme – 160MW (VGF INR7.5 million)
  • Talettutayi Solar Projects -30MW (VGF INR7.5 million)
  • Adani – 350MW (INR7.5 million)

As can been seen above, there is a good mix of large and small solar developers. The larger developers like Hero and Adani are bidding for a larger capacity, while small time players such as Solitaire and Tatettulayi are bidding for much lower capacities. It is interesting to see that foreign player participation has notably reduced. Softbank and SunEdison which bid aggressively in earlier auctions, have now gone away and do not want to participate at such low tariffs. First Solar has said they do not see a business case below INR 5/kWh in India.


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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