The tariff rate is 4.63 rupees ($0.0706) per kilowatt-hour.
By Sreekanth A Nair
US-based renewable energy development company SunEdison has won a bid to set up a 500-megawatt solar project in the southern state of India, Andhra Pradesh.
SunEdison won the bid to sell solar power at an all time low tariff of 4.63 rupees ($0.0706) per kilowatt-hour.
The new tie-up with the US Company is seen as a step forward to achieving Prime Minister Narendra Modi’s vision of clean energy to eliminate pollution and combat climate change.
Even though solar energy is still not as cost effective compared to the widely used coal, the reduced rate will bring more government support to renewable energy projects.
The government is depending more on renewable energy to combat climate change rather than trying to reduce carbon emission.
As per the cabinet decision of the Modi government, green energy resources are expected to yield a business worth $160 billion in the next five years. During this period, the biggest benefactors of the projects will be the US companies such as SunEdison and First Solar Inc.
The other companies that participated in the bidding were SoftBank Group Corp of Japan and Chinese solar products maker Trina Solar Ltd.
Earlier in July, ShyPower, a Toronto-based company, had won the bidding for a 150-megawatt solar project for a tariff of 5.05 rupees per kilowatt-hour, which was the lowest bid back then.
Government of India plans to install 100 gigawatts of solar capacity by 2022, up from about 4 gigawatts at the moment. To achieve this target, the government is providing loans at lower interest rates and helping companies to acquire land easily.
Some analysts and investors are apprehensive about the successful completion of the project as they believe the aggressively low pricing could create roadblocks and may stall the projects.
Bloomberg quoted Rupesh Agarwal, a partner at BDO India LLP, as saying, “We could see a repeat of what happened in the thermal power and the roads sector, where people took aggressive business calls, which was not good for the country in the end.”