Standard Post with Image

A New Low of INR 4.75 per unit in Solar Power Tariffs: A Positive Development

News

India’s strategy of a foreign currency-denominated tariff plan for solar energy is aimed at providing solar power at a new low of Rs.4.75 per unit to the states.

Source: Economic Times

SNP Insight

The move will help in attracting foreign investors to India’s solar energy sector by reducing the foreign exchange risk involved. Further the plans to involve bundling of unallocated thermal power to hedge the risk of rupee depreciation comes with positive outlook for achieving grid parity. The positives like purchase gaurantee can certainly make these projects bankable.  However with the consideration to include yen along with dollar and euro in the basket of currencies, there are chances of highly aggresive bids coming up from Chinese counter parts as well.

Source: SNP Infra Research