Twice has the mainstream media glorified solar energy tariffs wrongfully by terming them record lowest in Madhya Pradesh. First, Rewa solar power plant and now rooftop solar plants of 35 MWp state tender. In the former, the first year tariff was INR 2.97 and INR 1.58 in the latter. Media reporting lead to impressions that solar energy tariffs are floating at sub-levels 2. Team SolarDae busts the myth with its previous research and the recent research.
Sadly the media does not elaborate on the innovative model of the state keeping these tariffs low.
Madhya Pradesh policy provides for subsidy and escalation clause to the solar energy tariffs
SolarDae had brought clarification on the tariffs of Rewa solar power plant in which the first year tariff was INR 2.97. The media had then gone on to report that solar energy tariff had breached the level 3. Here is the schedule of the solar tariff of Rewa power plant.
The record low INR 2.97 in case of Rewa was only in the first year. From the second year onwards there was an escalation of INR 0.05 per unit till the 15th year of the plant operation. The levellized solar energy tariff for this plant is INR 3.30 per unit.
Similarly MPUVN rooftop solar energy tender had provision for subsidy as well as the escalation clause. Here the lowest solar tariff in the first year was INR 1.58 per unit for government buildings where the capital subsidy was 43%. The tender document has provision to escalate the 1st year tariff by 3% from 2nd to 25th year.
Here is the schedule of lowest solar energy tariff with and without subsidy:
With 43% subsidy, the levellised solar energy tariff is INR 2.08. INR 3.65 without any subsidy.
The true levellised cost of solar energy spread over 25 years in India has never breached INR 2. But the policy guidelines of these models have indeed helped in keeping the 1st year tariffs incredibly low. And when they are levellised based on escalation the tariff level is between INR 2-3 per unit for ground-mounted projects and between INR 3-4 for the rooftop solar segment.