Solar power tariffs fall to record low

There has been no increase in power tariff in the proposals for 2017-18 submitted by TSDiscoms to the TS Electricity Regulatory Commission on Thursday.

However, the proposal did not reveal how the Discoms hope to fill the revenue gap, which they estimated to be about `8,000 crore in 2017-18.

TSSPDCL CMD G. Raghuma Reddy handed over the tariff proposals to the ERC.

The state government has announced `3,500 crore in the Budget for power subsidy, meaning that the Discoms will have to generate about `4,500 crore to fill the revenue gap.

Discoms proposed removal of restrictions on the number of connections and acreage for dry land and wet land farmers, excluding corporate farmers for availing free power supply.

It was also proposed to extend free supply power to cultivation in polyhouses and greenhouses. Solar power tariff hit record new low on Thursday when it fetched a mere `3.15 per unit at an auction at the National Thermal Power Corporation’s 250 MW project in Kadapa of AP.

The previous low was `3.3 per unit was recorded when the 750 MW project at Rewa in Madhya Pradesh was auctioned by Rewa Ultra Mega power Company in February.

This is stark contrast to the average tariff of `12.16 per unit when the first solar power project started in the country in 2010.

In Telangana, the first solar power project started production in 2011, with the cost per unit coming to `15 per unit and a year later, reaching `17.91 per unit.

The downward spiral began in 2013 as the input costs began to fall. The initial investments for 1 MW of solar power was about `17.50 crore; it has now come down to `4 crore, mainly due to fall in the cost of solar panels.

The benchmark for cost of power as decided by the Centre is `1 per unit with an investment of `1 crore. The calculation is that if the investment for 1 MW of solar power is `5 crore, the cost per unit will be `5.