Solar energy tariffs, which plunged to a new record last week, can fall further, analysts said.
Solar tariffs set a new record of Rs 2.36 per unit in a 2000 MW auction conducted by the Solar Energy Corporation of India, the ministry of new and renewable energy's nodal agency responsible for conducting wind and solar auctions.
Almost the entire 2000 MW capacity was bagged by international developers including Spain's Solarpack, Italy's Enel Green Power and Canadian developer AMP Energy among others.
Over 5000 MW of bids were received for this tender.
The lowest tariff until now had been Rs 2.44 per unit reached in a SECI auction in July 2018.
"Market dynamics and bidding parameters have changed enormously. Most input costs have been falling notwithstanding rupee depreciation and higher GST rates," consultancy Bridge to India said in a report.
CRISIL Research noted that module prices are expected to remain low. "Module prices are also expected to trend down amid weak demand post-pandemic, especially from the already slowing key China market," it said.
It said that module prices will fall from the current $0.17/wp to $0.16/wp by the end of fiscal 2021. "It will be led by the oversupply and fall in global demand, which should help lower capital costs further," it said.
BTI's report said that tariffs might continue to fall further because there are many new developers that have entered the solar industry. "Setbacks in the last few years have instilled more discipline in the industry but with so many new players in the fray, it will not be a surprise to see tariffs sliding down further in the next few months," it said.
Source: Economic Times