SkyPower bids the lowest at Rs.5.05 for MP Solar project

With improving technology and declining costs, solar power is touching new lows each day. Madhya Pradesh received a very low bid by a Mauritius based solar company SkyPower. A price of Rs.5.05 was offered by SkyPower to a MP government owned power company for a 300 MW solar power bid. This price was without any subsidy. What is more surprising is the highest cost which was at Rs.5.64 for 50 MW from Hero Solar. SkyPower’s bid was the lower by 22% from MP’s own record of Rs.6.47 last year. Other important bidders who missed were SunEdison, Adani, Reliance Power, ACME, Mytrah and Welspun.

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Solar tariffs are fast declining, though still not competitive with the coal power which is at Rs.4 a unit. Solar energy has reached grid parity in many parts of the world, but the rate at which it is declining I think it will leave behind coal generated power in India as well. Last month in June, Austin Energy in Texas received a bid at less than 4 cents for 1.2 GW of solar power. The prices of equipment and installations are all going down very fast.

The bidders are taking advantage of the falling equipment, components and installation cost today. However, the costs seems to have been stabilised now and they need to be cautious before finalising their price. First Solar’s Rs 5.25 and Rs 5.35 was the lowest bid that India witnessed last year for two 40 MW solar projects in Andhra Pradesh.

“Bidders have been lucky as they have been able to take the benefit of a fall in costs. But that might not be the case anymore, as costs in solar have stabilised and it could be risky to put in aggressive bids,” he had said.

Source: Business Standard