According to reports, investors are likely to commit to over 190 MW of solar power generation in Tamil Nadu in response to the bids called by the Tamil Nadu Generation and Distribution Corporation, according to sources.
In January the utility had called for bids from private players to set up over 1,000 MW solar power generation facilities to supply to the grid for 20 years.
Over 90 bidders accounting for about 500 MW of generation capacity responded with bids ranging from Rs 5.97 a unit to about Rs 18.
Tangedco, the utility, offered to pay Rs 6.48 a unit, which, according to industry sources, was not viable for large players planning to set up utility scale projects.
Individual investors targeting the incentive of accelerated depreciation to offset income tax will find it attractive enough, according to some of the bidders.
Predominantly individual players and a couple of large investors, including a company with a presence in EPC contracts and utility scale solar power projects, have committed to set up generation facilities.
Apart from concern about the tariff, which impacts bankability of the project, adequate payment security issues are also a concern for investors who are worried about timely payment of tariffs from the cash- strapped utility, the source said.