India’s solar prices to drop amid competition
The price paid for solar power in India at auction is set to fall below last year’s record lows for the South Asia nation, driven by plummeting panel prices, falling interest rates and competition among developers seeking a slice of the country’s renewables market.
Prices could dip lower than the Rs4.34 a kilowatt-hour offered in auctions held in Rajasthan a year ago, according to at least one developer of solar projects in India.
“This year we will see prices fall below Rs4 a kilowatt-hour for sure and it will be viable,” said Rahul Munjal, chairman and managing director of Hero Future Energies Pvt., the clean-energy arm of Hero Group, one of India’s largest automakers.
“We feel interest rates will go down and the cost of solar panels will fall, so these will have a great effect on breaching the Rs4 a unit-mark,” said Hero Future’s Munjal, adding that he’s looking at a 500 basis-point decline in domestic interest rates.
Hero Future Energies, backed by the International Financial Corp., operates 360 megawatts of wind and solar capacity and has another 1.4 gigawatts of projects in the pipeline. The company plans to participate in some of the upcoming auctions.