Bidding behaviour in solar not sustainable | BTI
In its latest report, 'Analysis of utility scale solar tenders in India', Bridge to India examines recent bidding history for all PPA-based, open category tendered projects to understand risk-return relationship in the sector. From July 2015 to December 2016, India allocated 12.6 GW of solar projects to private developers through an open, competitive tender process. These tenders have seen tariffs trending downward from about `5.50-6.00 (US- 8.4-9.2)/kWh in mid-2015 to Rs.3.29 (US - 5.0)/kWh in 2017, equivalent to an annualised decline of over 25 per cent. Common perception is that auctions and increased competition are forcing developers to bid aggressively resulting in tariffs coming down so fast. But BTI's analysis shows that changes in equipment costs and other factors are responsible for most of the decline. Adjusted for these changes, tariffs haven't trended down in the last 18 months.