According to reports, with cost of setting up solar power projects coming down, the Gujarat Electricity Regulatory Commission (GERC) has proposed to reduce the solar power tariff for new plants coming up in the state.
For the first time, the electricity regulator will be introducing the reverse bidding system for sale of solar power in the state. Under this system GERC will fix the upper limit to be charged per unit of solar power. The power producers who seek to enter into power purchase agreement (PPA) with the state power distribution companies will bid for the lowest rate of power.
“In the earlier tariff order the rates were fixed and power was sold at that price. But under reverse bidding the rates proposed is upper limit and power companies cannot quote above that price for PPAs,” a senior GERC official said. The Electricity Regulator has proposed to set the price of solar power to upper limit of Rs 6.68 per unit from fixed price of Rs 8.39 per unit for new power plants coming up between July 2015 and March 2018.
The tariff for solar photovoltaic (PV) projects was fixed at Rs 12.54 per unit and for solar thermal projects it was Rs 9.29 per unit in 2010 by the GERC. Every three years the regulator revised the tariff based on the reduction in setting up cost of power plants.
The Commission last week released a discussion paper to determine the tariff for power from solar PV and solar thermal power plants in Gujarat for the control period 2015-2018. They have invited comments and suggestions from all stakeholders and consumers over the new proposed rates.
The cost of photovoltaic modules, which contributes to more than 50% of the cost of the photovoltaic power plant, is steadily declining along with inverter costs. As per estimate of GERC, the cost of setting up a 1 MW solar power plant now has come down to Rs 11 crore from Rs 16 crore a few years ago.