The solar tariff prices have hit a new low of Rs 3.15 per unit in an auction on Wednesday . The previous low in tariff was Rs 3.30 per unit in an auction which took place in the month of February.
In an article by Livemint
, Mercom Capital Group has the following observations: This decrease in tariffs is causing the states to rethink and they are demanding a new power purchase agreement (PPA). This is causing the process of tendering and auctioning to slow down. An example of a state where such a thing has happened is Jharkhand. It is yet to sign its PPA for the 1000 MW solar capacity it had auctioned last year. The reason behind this is the subdued demand and poor financial condition of the discoms. The discoms which had signed their PPAs at a higher tariff are now going to find them unpalatable as they would lean towards cheaper tariff. Therefore, projects locked at higher tariffs will face delays in payments or power offtake curtailments. This might not only affect renewable energy power but also have an impact on renewable energy contracts.