With solar power tariffs falling below Rs 3 per unit in auctions last month, a major player in the solar rooftop space says they are on course to fall further given that the recent demonetisation measure has come as a boost to industry because of the availability of cheaper finance. “Demonetisation is helping the industry get cheaper loans,” Kushagra Nandan, President of SunSource Energy, told IANS in an interview. SunSource Energy is a key player in the Indian solar space with 100-odd commissioned and under-execution projects spread across 14 states. “Even at the retail level prices are getting competitive with solar tariffs having come down to the range of Rs 5-6.50 per kilowatt hour (kWh). Tariffs are going to get lower,” Nandan said.
Solar tariffs fell to record lows last month when major players, including foreign firms, won separate contracts for building a 750 MW solar park in Rewa, Madhya Pradesh, with bids to supply power at less than Rs 3 per unit. Nandan said that banks being flush with funds, for lending at easier rates after the November demonetisation of high-value currency, has come as a boost for an industry to which investors are being drawn by the lure of good returns. “Investors are keen to invest in solar, which has become a proven investment mechanism offering 13-15 per cent return on investment, as compared to the single-digit returns coming in from FDs, for instance.