2021 witnessing upward solar tariff trends
The tariffs discovered in the two most recent solar auctions by Torrent Power Ltd. (TPL) and NTPC Ltd. witnessed L1 tariffs at Rs. 2.22/kWh and Rs. 2.25/kWh, respectively. These are well above the ultra-low tariffs of Rs. 1.99 to 2 per kWh discovered in earlier SECI 1070 MW Rajasthan tender auction and GUVNL 500 MW solar tender auctions completed last year.
Key reasons for this uptrend can be:
- Limited participation of international developers (Aljomaih, Sembcorp) and PSU’s (NTPC, SJVN), which quoted aggressive tariffs in earlier SECI 1070 MW Rajasthan tender and GUVNL 500 MW tender.
- Module prices have seen a sudden surge in recent times. Prices have increased from USD20 cents/ Wp in July 2020 to USD 22-23 cents/ Wp in Jan 2021.
- It is also observed that most module suppliers are now selling modules at FOB (Free on Board) prices instead of CIF (Cost, insurance, and freight) prices, to take care of rising transportation and logistics costs.
- NTPC projects would be built in a solar park unlike in the case of the previous SECI 1070 MW tender, where projects would be in non-solar park locations. Thus, the high upfront and maintenance costs of solar parks can also be the reason for the increase in tariffs in the NTPC auction.
In Torrent Power’s 300 MW solar auction, Torrent Power Generation, and Adani Green Energy were the winners, securing projects of 150 MW capacity each. Both the winning bidders quoted their bids at the same rate of Rs. 2.22/kWh. The projects are required to be developed in Gujarat. The tender was oversubscribed by 300 MW. Other participants in this auction were Renew Power (150 MW), Juniper Green Energy (100 MW), Vector Green Energy (50 MW). The low participation in the bidding can also partly be attributed to the stringent PQ (Plant Quarantine) condition set by Torrent Power. Further, TPL is offering a greenshoe option of 300 MW capacity to the project winners.
In the case of NTPC’s auction of 190 MW solar project at Nokh Solar Park in Rajasthan, Rising Sun Energy emerged as the sole winner of the total capacity. Rising Sun Energy is a Delhi-based Independent Power Producer operating a 140 MW solar power project at Bhadla Solar Park, Rajasthan. Rising Sun Energy has not participated in any other bids in 2020. Ostensibly, the remaining bidders were Tata Power Renewables, Renew Power, Vector Green Energy, Sprng Energy, Ayana Renewables, O2 Power, Avaada Energy.
The two auctions saw greater participation from small and mid-sized companies. Also, both Renew Power and Vector Green Energy were familiar participants across the TPL and NTPC auctions.
Fig.1: 300 MW TPL and 190 MW NTPC Solar Auction results

Source: JMK Research
Furthermore, the latest announcement of 40% Basic Customs Duty (BCD) on solar modules and 25% on solar cells from April 2022 onwards will further lead to an increase in solar tariffs.
Check our related latest analysis on What led to the historic low solar tariff of Rs. 2/ kWh in India?