India Unable to Compete With Record Low Solar Tariffs in Gulf Region
An Analysis of Why the Gulf Region Has the Cheapest Solar Tariffs
In a new report from JMK Research & Analytics and the Institute for Energy Economics and Financial Analysis (IEEFA), a detailed analysis is done to analyse why the Gulf region has the cheapest solar tariffs in the world.
It is unlikely that India or indeed other countries will be able to achieve the same low tariffs recorded in the Gulf, as the economic makeup of each country plays a direct role in determining tariffs.
Comparing Gulf Region and Indian Solar Tariffs
Solar tariffs in the Gulf region are the lowest in the world, even lower than the tariffs being achieved in India.
To understand how the Gulf region is achieving such low tariffs, and whether those tariffs can be achieved in other countries, we developed a financial model as a basis for comparison.
Applying this model to India, we found solar tariffs landed in the range of US¢3.46 – 3.56/kWh[1], almost double the tariffs in the Gulf region.
Break-up of Tariffs for Gulf Region and India

Source: JMK Research.
Note: 1 USD is considered equivalent to 75 Indian Rupees.
* Case 1- Project with bifacial mono PERC modules with single axis trackers; Case 2- Project with mono PERC modules with fixed tilt.
The key reasons why the Gulf region has lower tariffs than India include:
- Lower cost of US$ denominated, long-dated financing;
- Lower expected return on equity (ROE);
- Higher solar resources leading to higher capacity utilization factor (CUFs);
- No corporate taxes nor duties on equipment and power sales; and
- Negligible land cost for solar projects.
Awarded tariffs in the Gulf countries and in India have zero inflation indexation over the 25-year power purchase agreement, meaning the real tariff is contractually set to decline annually, driving electricity system deflation.
Click here to download full report
[1] 1 USD has been considered equivalent to 75 Indian Rupees.