India has advanced the target date for selling solar power at the same rate as conventional electricity by five years to 2017 as tariffs have fallen significantly in the latest projects on offer and the trend is likely to continue

Government officials said that companies have bid tariffs as low at 7.49 per unit for solar plants this year, encouraging the renewable energy ministry to say that target of achieving grid parity, or selling solar electricity at the same rate as power from other sources, would be achieved much faster than earlier envisaged.

Mr Tarun Kapoor joint secretary ministry of new and renewable energy said that "The prices will come down further next year and will continue to fall.” He added that "Earlier, our aim was that solar will achieve grid-parity by 2022, but looking at the upbeat response from the industry, we have now reduced our target to 2017.”

Tariff from existing coal projects is around 5.50/unit to 6/unit, propped up by the shortage of domestic supply of coal and greater dependence on costly imports.

The average tariff offered in the current round of bidding under the National Solar Mission was 8.78 per unit. The lowest bid was 7.49 per unit for a 5 megawatt project by SolaireDirect, a French company.

For the current round, the maximum capacity was set as 50 megawatt per bidding company with 3 projects allotted to each. Among the 28 provisionally sanctioned projects, 8 are of 20-mw, another 10 are of 10 mw. Four projects are of 15 mw and 6 projects of 5-mw.

Mr Inderpreet Wadhwa CEO of Azure Power one of the companies which has bagged projects to set up 35 megawatts said that majority of the peak demand will be met by solar power by 2017. Mr Wadhwa added that "Solar has the same potential as personal computers had in 1970's. Technology innovations and improvements in manufacturing would drive down costs further.”

The company quoted a price of 17.91 per unit for the first plant it had set up in 2009. During the current round of bids, the company quoted bid price of 8.21, a drastic fall of 50 %.

(Sourced from ET)