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Govt Benchmarks Solar Tariffs

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The Union Government is going to benchmark solar tariff at Rs 4.5 per unit. This is going to be the benchmark price for solar power projects above which companies will be bidding for a viability gap funding from the government.
This has come about at the time of constant dipping of tariffs in competitive bidding of solar power projects. The last bidding was at Rs 4.63 per unit by SunEdison of US and SoftBank also clenched its 350 Mw solar power project at the same rate.
The Central Electricity Regulatory Commission (CERC) will clear the benchmarking of tariff with the new norm offering buyers a stable tariff regime. Solar power companies will bid for VGF requirement and the one that bids with minimum VGF requirement will be chosen.
As per Rupesh Agarwal, BDO India LLP, “Given the recent bid outcomes in Andhra Pradesh and Madhya Pradesh, and the new norms for capex that CERC announced recently, the benchmark revision of tariff under VGF was on the cards. However, it may be worth-while to contemplate if we should have one tariff regime or multiple schemes for a longer-term perspective.”
The government is planning to give a plethora of projects through the VGF mode for stabilising the market, as stated by officials. Funding modalities are still to be worked out.

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