MSEDCL’S 500 MW tender discovers Rs.2.90/KWH. It is an upward tariff trend.

It is interesting to note that the solar tariffs which went as low as Rs.2.0/ KWH a year back are now heading upwards. Last month we observed the solar pit tariff as Rs. 2.45/KWH in one of the SECI pits. Now the state distribution company of Maharashtra MSEDCL has discovered Rs.2.90 as the lowest tariff which shows an upward trend.

The winners in this 500 MW solar pit include SJVN energy, Juniper energy, Avaada energy, Tata Power, and Sukhbir Agro energy. As this is a state-level solar tender the tariff is expected to be higher as compared to the typical central government-led solar tender floated by SECI.

Why most bid participation is being observed that very few players are left to participate in these solar tenders? Most of the players who participated already have over 2-5 GW of the capacity already to be executed.

The solar module prices are not expected to come down in near future. Though we are exploring the domestic manufacturing of solar modules is being pushed aggressively, the global shortage of polysilicon is still driving the module prices upward. The typical commissioning timeline for this solar pit is about 18 months and most of the developers are betting on a price fall after a year. In case there is a price fall these tenders will find most of the capacity commissioned. However, the list of higher prices of PV modules may leave much of the tender solar capacity uncommissioned.