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Tata BP Solar proposes selection of bids at closer to average price to weed out “unrealistic low bids”

According to this report in Bloomberg, bidders in India’s first solar auction have committed to building plants at unviable rates because they don’t understand the costs of the technology, Tata BP Solar Ltd. said.

The government, expected to award the next round of licenses later this year, should select bids closest to the average to weed out unrealistically low ones, said Anil Patni, deputy general manager of the photovoltaic equipment maker.

The auction should’ve worked “by the textbook,” Patni told the Noppen India Solar Energy Summit in New Delhi last week. “The problem is the market doesn’t really have a grip on the real numbers” because the technology is new.

However, K Subramanya, CEO, Tata BP Solar, has been a critique of the National Solar Mission and has said that competitive tariff bidding in the first phase of the National Solar Mission will lead to failed projects.

What is pertinent to note here is that, most of the project developers in the state of Gujarat have awarded the order for panels to foreign manufacturers and those in the National Solar Mission are also being bagged by mostly foreign thin film providers. Indian developers when speaking to Panchabuta have opined that the Indian manufacturers have been unable to match the cost and provide the funding mechanisms that the overseas players are offering currently.

Panchabuta, believes that it is too early to call the bids unrealistic and eventually it will be interesting to see which of these projects do actually happen. However we are cautiously optimistic and will keep a close watch on which of these projects do achieve financial closure in July which will be a very important milestone.

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