According to reports, Bridge to India (New Delhi, India) has released a new policy brief that predicts that tariffs will fall to INR 6.2/kWh (USD 0.11/kWh) in the Indian state of Tamil Nadu’s newly opened round of competitive bidding for solar electric projects.
This would be the lowest tariff yet seen in the Indian market, lower than the INR 7/kWh (USD 0.13/kWh) tariff for PV projects allocated by the Indian state of Odisha. The Tamil Nadu Solar Policy aims to have an installed capacity of 3 GW by 2015, of which 1.5 GW will be utility-scale solar.
Tariff escalation makes low initial rate possible
Bridge to India calculates that a rate of INR 6.2/kWh would supply a 12.8% internal rate of return. The tariff will escalate 5% annually for 10 years, which the firm says makes the low initial tariff possible.
Bridge to India concludes that this tariff means that solar power has reached commercial grid parity, as retail electricity rates for Indian consumers can reach as high as INR 10/kWh in some states.