Solar tariffs in Karnataka tender go up but DISCOMS can cheer

Solar tariffs in Karnataka tender go up but DISCOMS can cheer

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Solar tariffs in Karnataka tenders have gone up considerably high in the recent times (Read). The range of tariff is between INR 2.94-3.34 per unit. From the last concluded auctions in December, the lowest tariff of this auction is up by INR 0.50 per unit. The lowest solar energy tariff in India on the date is INR 2.44. In December the solar tariffs touched INR 2.47 & 2.48 per unit.

Team SolarDae feels that the relatively higher solar tariffs are also normal in the present scenario.

 

Even at high solar tariffs Karnataka DISCOMS have reasons to cheer

 

KERC had revised the benchmark tariff for solar energy to INR 3.57 per unit which is the APPC rate of Karnataka’s DISCOMS. Therefore even if the solar tariffs discovered in these tenders are relatively high, they are lesser than the DISCOMS’ APPC rate. To keep their APPC rates low a few DISCOMS in 2017 had forced the solar developers to renegotiate the tariffs. It is unlikely that the Karnataka DISCOMS will also resort to such measures.

It is obvious from the graph that the solar tariffs discovered in the tender is lesser than other power purchasing sources.

Solar tariffs in Karnataka tender go up but DISCOMS can cheer

Source: SolarDae Research

In fact, the latest solar tariffs are an all-time low in Karnataka in comparison to old or new solar projects with which DISCOMS have already signed PPAs. In fact, the PPA for solar power purchase of Karnataka DISCOM is least at INR 3.50 per unit. Others are over INR 5.30 per unit.

 

SolarDae Take:

 

At a time when Indian solar market has adjusted to the implications of GST and fretting on the news of import duties on solar panels and maybe depressed/indifferent by/to the announcements of the budget, solar tariffs were bound to go up. Thus the relatively higher tariffs of Karnataka are normal under the unfavourable circumstances.

It is also noteworthy that in these auctions it was the responsibility of solar developers to identify lands. Also, they had to bear the cost associated with the development phase of the project. This is normal in most auctions called by a state government. Karnataka was thus no exception.

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