{"id":20163,"date":"2017-05-10T07:26:04","date_gmt":"2017-05-10T01:56:04","guid":{"rendered":"http:\/\/www.greenworldinvestor.com\/?p=20163"},"modified":"2017-05-10T07:26:04","modified_gmt":"2017-05-10T01:56:04","slug":"indian-solar-price-falls-to-just-inr-2-62kwh-4-cents","status":"publish","type":"post","link":"https:\/\/iiec-india.org\/greenworld\/2017\/05\/10\/indian-solar-price-falls-to-just-inr-2-62kwh-4-cents\/","title":{"rendered":"Indian Solar Price Falls To Just INR 2.62\/kWh (4 cents)"},"content":{"rendered":"

Solar becomes Power King Displacing Coal<\/h1>\n

Indian solar prices have been crashing to new lows driven by two main factors:<\/strong><\/p>\n

a) Falling solar panel prices due to a combination of Chinese overcapacity and rapid technological improvements<\/p>\n

b) Falling interest rates in India with the 10 years government bond yield at multi-year lows of 6.25%<\/p>\n

Other minor factors driving the low prices are the huge competition with a very large number of players looking to build their renewable energy portfolios in the Indian markets. International companies, private equity backed platforms, domestic conglomerates as well as major utilities are all fighting to get a slice of the pie.<\/p>\n

\"IMG-20170510-WA0002\"<\/a><\/p>\n

But INR 2.62\/kWh \u00a0(USD 4 cents\/kWh)<\/strong> was not expected by anyone in their wildest dreams this year. Even a year ago when someone bid INR 5.1\/kWh, they were thought to be crazy and that the project would fail for sure. But the critics failed to notice the fact that solar prices were being bid even lower in other places in the world. In the Middle East and Mexico prices of 3-4 cents\/kWh was being seen routinely. It is expected that a new Saudi solar auction tender could see prices go as low as 2 cents. So India at INR 2.62 or 4 cents is nothing out of the world!<\/p>\n

Also read,\u00a0Another Solar Auction in India<\/a> leads to low developer interest and reasonable tariffs.<\/em><\/strong><\/p>\n

The INR 2.62 was bid by a South African group (Phelan) as well as Welspun Energy for building a solar plant in Rajasthan\u2019s Bhadla solar park<\/strong> (Phase 3). There were other multiple bids below the 5 cents\/kWh mark, which means that the bids were not irrational by the winners though they are risky in my view. Softbank just missed by 1 paisa.<\/strong><\/p>\n

However, the Indian market faces some unique challenges which are not that acute in the other places of the world. One is the poor finances of the buying distribution utilities who do not have the money to pay back the solar developers in time. The other is the power grid which is one of the weakest in the world. With more solar and wind power entering the grid in the coming years, this problem will become larger.<\/p>\n

INR 2.62\/kWh is truly a landmark price and announces solar as the king of the power sector in India<\/strong> displacing coal years in advance. New coal power plants cannot be built at less than INR 4\/kWh and that too after years of construction and getting clearances from forest, land and environment departments. In contrast, a solar power plant can be put up in 3-6 months in deserts<\/strong>.<\/p>\n

My heart would be having strong palpitations if I was the owner of a thermal or a gas power plant without a PPA. This means the end of the coal power development in India<\/strong>. While the intermittency will allow some of these plants to get built, I would be selling my coal, thermal power and related equipment stocks as fast as possible.<\/p>\n

Also<\/em><\/strong>, read\u00a0How Solar Industry Could See A Major Convulsive Shock<\/a> At The End Of The Year.<\/em><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Solar becomes Power King Displacing Coal Indian solar prices have been crashing to new lows driven by two main factors: a) Falling solar panel prices due [\u2026]<\/span><\/p>\n","protected":false},"author":1,"featured_media":20164,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_eb_attr":"","content-type":"","footnotes":""},"categories":[30,45],"tags":[1716,3019,3020,4728],"class_list":["post-20163","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-india-green-stocks-greeninvest","category-solar-renewable-energy-greeninvest","tag-end-of-the-coal-power-development-in-india","tag-indian-solar-price-falls-to-just-inr-2-62kwh","tag-indian-solar-prices-have-been-crashing-to-new-lows","tag-solar-as-the-king-of-the-power-sector-in-india"],"_links":{"self":[{"href":"https:\/\/iiec-india.org\/greenworld\/wp-json\/wp\/v2\/posts\/20163","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/iiec-india.org\/greenworld\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/iiec-india.org\/greenworld\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/iiec-india.org\/greenworld\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/iiec-india.org\/greenworld\/wp-json\/wp\/v2\/comments?post=20163"}],"version-history":[{"count":0,"href":"https:\/\/iiec-india.org\/greenworld\/wp-json\/wp\/v2\/posts\/20163\/revisions"}],"wp:attachment":[{"href":"https:\/\/iiec-india.org\/greenworld\/wp-json\/wp\/v2\/media?parent=20163"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/iiec-india.org\/greenworld\/wp-json\/wp\/v2\/categories?post=20163"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/iiec-india.org\/greenworld\/wp-json\/wp\/v2\/tags?post=20163"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}