The Solar Energy Corporation of India’s (SECI) latest auction has witnessed a record low bid of INR2.36 (~USD0.0313) per kWh. The 2 GW auction of the interstate transmission system (ISTS) connected solar projects (Tranche IX) saw several domestic and global IPPs bid for project capacities. The L1 (lowest) tariff, quoted by Spanish developer Solarpack Corporacion Tecnologica SA, is about 3.3 per cent lower than the previous lowest quoted tariff of INR2.44 (~$0.032) per kWh in the country.

Solarpack has secured 300 MW of project capacity. Other successful bidders under the auction include Goldman Sachs-backed Indian business ReNew Power, which secured 400 MW of project capacity; Italy’s Enel, French firm Eden Renewables, the Singapore business of German developer Ib vogt, and U.K. development finance-backed Ayana Renewable Power, all of which secured 300 MW slices each; and Indian outfit Amp Energy which secured 100 MW of capacity.

DeveloperVGF (INR)Tariff  (INR per kWh)Capacity won (MW)
Solarpack Corporacion Tecnologica SA0.002.36300
Avikiran Surya India Private Limited0.002.37300
AMP Energy Green Private Limited0.002.37100
Eden Renewable Bercy Private Limited0.002.37300
IB Vogt Singapore Pte Ltd0.002.37300
Ayana Renewable Power Private Limited0.002.38300
ReNew Power Solar Power Private Limited0.002.38400

Tata Power Renewable Energy quoted a tariff of INR2.39 (~$0.0317) per kWh for 600 MW of projects, and O2 Power SG Private Limited quoted INR2.46 (~$0.0327) per kWh for 400 MW but did not win any capacity.

There are several reasons for the low tariff quoted under the tender. One, the basic customs duty for these projects will be exempted or see a passthrough. Two, the Approved List of Models and Manufacturers (ALMM) clause will not be applicable for these projects. And three, there is a growing belief in the industry that the price of solar modules will see a steep fall, and forward contracts for the modules may bring down the price even further.

REGlobal’s Views: India has witnessed three historic bids consecutively, all during a period of Covid-related lockdown. Starting with the country’s first round-the-clock tender in May 2020, followed by world’s largest manufacturing-linked solar tender of USD6 billion in June 2020 and now historically low tariff of SECI Tranche IX auction, India has retained its position as one of the most attractive destinations for solar energy investments globally. The latest tender (and the two before) is a clear manifestation of Indian solar sector’s resilience, vibrant ecosystem, and strong renewable push by the government.