There was a recent change of GST rate for solar power equipment raising from 5% to 12%. This Tariff Hike is likely to cause a rise in the upcoming solar bids in future by 20-25 paisa/unit.

Despite this hike, the tariff hike will likely remain as competitive and low as Rs 3 per unit. This is stated in the Indian Renewable Energy Sector, October 2021 report. The details given in the report include wind tariffs which are below Rs 3 per unit. This price is still competitive against the marginal cost of generation from thermal sources.

This report assumes great significance when we keep the ambitious target of achieving 450 GW by 2030 set by India.

The price of Mono PERC PV modules in India has increased from 19-20 cents/watt in December 2020 to 27-28 cents/watt in October 2021. A sharp hike of over 35% in just a bit over 10 months.

These prices are likely to remain high in the near future due to disruption in manufacturing operations in China due to power cuts and shortages. Not only are PV prices are a problem but also the sharply rising cost of metal such as steel and aluminium used for structural strength and mounting is also a huge concern.

The growth of solar and wind capacities despite the hike has been possible because of support from SECI and NTPC which have worked as strong intermediate procures.

Reference: Saur Energy