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Solar energy tariffs remains high in Uttar Pradesh tender

Solar energy tariffs in Uttar Pradesh continue to remain on the higher side- beyond INR 3. The state agency UPNEDA has just concluded the 500 MW solar tender in which the lowest tariff is INR 3.17. The auction is a part of earlier 1000 MW solar capacity that the agency had cancelled citing very high tariffs. The lowest solar tariff in the auction was INR 3.48. Even in SECI auctions of 50 MW and 75 MW, the tariffs were INR 3.38 & 3.32 respectively.

Although the tariffs in the latest auction have gone down they remain above INR 3. Higher land and borrowing costs are the reasons for the higher cost of solar energy in the state.

The result of the latest solar energy auction

The auction was oversubscribed 1.5 times. The winning solar power tariffs were between INR 3.17-3.23 per unit. The difference is INR 0.06 per unit. Recently, the Ministry of Power had accused Soft Bank of cartelizing the tariff of solar energy. The difference of INR 0.27 between the highest and lowest tariff was the basis of the allegation.  According to the minister usually, the difference in highest and lowest quote is not more than INR 0.10. Soft Bank had denied any wrongdoing.

Solar energy tariffs remains high in Uttar Pradesh tender
Source: SolarDae Research

Despite high solar energy tariffs in Uttar Pradesh, the auction reinforces the belief of the Power Minister that the differences in tariffs in any auction do not go beyond INR 0.10. Clearly, the solar energy tariffs in the UPNEDA auction increased gradually.

While Maheshwari Mining quoted the lowest tariff at INR 3.17, Giriraj Renewables quoted the highest of INR 3.23. The latter had bid for 300 MW but it will have to be content with only 50 MW. Solar energy radiation in Uttar Pradesh is weak. This combined with high land and borrowing cost increased the tariff.

Post Author: Ankur Kumar Jha

Founder SolarDae || MBA Power Management || B.E (Mechanical)

Ankur analyses mainstream media coverage of renewable energy in general and solar in particular; he tracks the ongoing development of regulations and policies and incorporates them in his opinion. He can be reached at +91-8860726731 for any assistance in rooftop solar and utility-scale projects.

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