Record low tariff bidding for new solar projects, due to chance coming together of many positives

Rating agency Crisil on Friday said absence of any formal duty on imports at the time of projects tendering and lower returns globally in the wake of COVID-19 outbreak have resulted in competitive tariff rates in the solar energy sector.

According to the agency, a chance coming together of several positives has led to a new record low tariff bid in the interstate transmission system (ISTS) tranche IX auctions of the Solar Energy Corporation of India (SECI).

Improved interest from global firms in the Indian solar sector, especially given the environment of lower returns globally due to the COVID-19 pandemic, and absence of any formal duty on imports when the projects were tendered, resulted in the discovery of lowest tariff of Rs 2.36 per unit for the Seci bids, says Crisil.

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