Solar power generations prices are set to fall further during 3rd and 4th quarter of 2017-2018, assisted by expected softening of interest rates and a drop in solar panel prices because of supply gut in the international market, according to analysts.
Last month, solar power prices hit a low of Rs 3.30 which is equal to average generation tariffs of NTPC which produces majority of its power from coal.
The lowest cost of generation of NTPC from one of its old plant is around Rs 1.80 per unit however on average solar power prices are expected to become significantly lower than thermal power as solar generation prices fall further.
Senior Vice President ICRA Ratings, Sabyasachi Majumdar stated that, interest rates are anticipated to soften this year thus bringing down cost of generation of solar power plants. This is expected to bring down generation tariffs further from the new low achieved in February.
Solar tariffs in India touched a low of Rs 2.97 per unit in February for the first year of generation and an average tariff of Rs 3.30 per unit at bidding for solar plants in Rewa, Madhya Pradesh.
According to S Majumdar, India’s demand for solar panels is expected to be twenty percent lower as compared to 2016.