Solar Becomes More Affordable as Tariff Drops to All-time Low of Rs 4 a Unit in India

Solar Becomes More Affordable as Tariff Drops to All-time Low of Rs 4 a Unit in India

India is facing an acute energy scarcity which is hampering its industrial growth and economic progress. Setting up of new power plants is inevitably dependent on import of highly volatile fossil fuels. 

Thus, it is essential to tackle the energy crisis through judicious utilization of abundant the renewable energy resources, especially free solar energy.

Those who are interested in investing into clean energy production, there is a good news as solar is becoming increasingly affordable in India.

Bhadla solar park in Rajasthan (Image credit: The Hindu)

India has been heavily backing renewable energy with various ongoing investments in infrastructure which helps in reducing the cost of providing solar power.

Cheaper electricity sourced from the expansion of solar plants across the country could help make for a better, more reliable grid, and one that's less harmful to Indians and the environment at large.

Now, solar power tariff is further reduced to an all-time low of Rs. 4 per unit in bidding for a 750 MW solar power project at Bhadla solar park in Rajasthan, reports ET.

The lower tariff trend of solar power is not new in India, earlier the tariff had touched a record low with Finland based energy firm Fortum Finnsurya quoting Rs. 4.34 per unit to bag the mandate to set up a 70 MW solar plant under NTPC’s Bhadla solar park tender.

“Solar Energy Corporation of India (SECI) has finalised a tender issue for 750 MW solar PV projects in Bhadla solar park, Rajasthan, at a record low tariff for power sale of Rs. 4 per unit with VGF (viability gap funding) support,” a source said.

The source further said, “With this SECI has completed auction of more than 5 GW (total being 5,410 MW) under VGF scheme in a span of less than 15 months. Of this power purchase agreements (PPAs) have been signed for 2,520 MW and PSA (power supply agreements) signed for 2,725 MW,” reports ET.

Lower solar costs combined with rising prices of grid power will convince offtakers (including distribution companies, private firms using open access, and firms putting up their own captive capacity) that solar power is more economically viable to general public in India.

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