NTPC, India’s largest thermal power generator, is hopeful on average tariff for solar plants falling to the extent that they would give a good run for money to coal-fired generating stations.
NTPC chairman Gurdeep Singh has said Rs 3-3.20 a unit tariff for solar power may be the new normal and can be achieved without the support of “cheap funds or cheap panels“, which have been a concern for the industry.
Singh’s comments assume significance given that subsidy payout by the government is seen as necessary to make solar power viable.
India has targeted to have 1 lakh mw solar generation capacity by 2022, slightly over 12,000 mw at the end of March this year. The target is increasingly looking realistic as prices of solar power equipment have fallen significantly in recent years, encouraging investors to increase their bets on the sector.
“We should be happy with lower solar bids, especially when the process is done in such a transparent manner. In the current environment, solar power tariff would be Rs 3-3.20 a unit without relying on cheap funds or compromising on quality ,“ Singh said.
The Parliamentary Standing Committee on Energy gave critical feedback on the solar energy sector, asking the government to help developers raise funds but has also raised concerns over the viability of these projects given the steep fall in tariff as a result of aggressive bids by developers.
The solar power tariff plummeted to its lowest level in May at Rs 2.44 per unit energy in the auction for 500 mw of projects in Rajasthan. The tariff was about Rs 11 seven years ago.
Although Singh did not comment on the viability of project that are offering solar power at Rs 2.44, he did say that solar energy would play an important role in incremental capacity addition in the country but coal based-power would continue to be necessary to ensure cheap and continuous power supply to consumers.