Two government officials said ministry of new and renewable energy expects that 400 MW solar power will flow to the grid by the end of this financial year as many projects awarded last year are nearing completion.

They said that the ministry has so far achieved 183-MW generation capacity since the solar mission was launched in January last year with a thin generation base of 3 MW.

An official said that "The optimism is also reflected in aggressive investors' bids that lead to its tariff falling significantly below regulated rates.”

The solar power tariff which was as high as INR 17.91 per unit in November 2010, has dropped by over 58% at INR 7.49 per unit, the bid offered by French company, SolaireDirect SA in the latest auction earlier this month.

The Central Electricity Regulatory Commission limits solar power tariff and bidders quote rates below that price. Another official said that "The solar power tariff is inching closer to domestic coal-based power tariff. It is certainly cheaper than power generated from imported coal, which costs over INR 10 per unit.”

Developers said that the declining tariff is a natural consequence of significant reduction in project cost. Azure Power CEO Mr Inderpreet Wadhwa said that "Since the capital cost of project reduced to half, a 50% reduction in tariffs was only logical."

(Sourced from ET)