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Solar Energy Continues to See Super Low Prices in Recent Auctions just like Normal Times

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The global solar industry has not been unaffected by the COVID crisis as the whole world economy contracts due to shutdowns affected in almost every other country leading to a sharp slowdown in demand across sectors. Power also has seen a demand contraction as industries and commerce have slowed down. But the solar energy industry as a whole has not seen much of an impact as compared to the rest of the energy industry with oil seeing negative prices and many energy companies firing thousands of people as they see a prolonged slowdown for their products and services. Solar energy also has not been negatively impacted by supply chain issues as the Chinese factories have returned to operations after a temporary hiatus. Recent tenders have also shown that prices continue to move down, despite earlier fears that prices of equipment would increase due to supply chain disruptions globally.

A recent tender by Abu Dhabi saw a record low price of just USD 1.35 cents/kWh which is one of the lowest ever and continues the tradition of the Middle East seeing the lowest prices for solar energy globally. The reason for the Middle East tenders seeing these 1 cent range prices is multiple – very good solar resources, large and zero land costs, massive scale, and the cheap finance that comes due to the off-takers being very rich and fears of default or deferrals are very very low. Even India saw a recent state tender by NHPC see very good participation and prices of around 3.2 cents per kWh which was much better than anticipated given the problems that the Indian power sector is seeing right now.

The solar industry has become a much more attractive energy sector as compared to the other energy sectors such as oil, gas, or coal that face a deluge of secular and cyclical problems. Most large investors have completely turned off their investments given the huge risks in the sector as well as their commitment towards climate change efforts.


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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