It’s happening now — Solar power at INR 1.89 /Kwh ??

Yes , NV Energy which is an indirect subsidiary of Berkshire Hathaway Energy Company (Owned by THE Warren Buffet ) has signed a 20 year PPA for 100 MW solar project  at Lowest ever rate of US$0.0387/kWh i.e. approx INR 1.89 (Considering  INR 63 = $ 1 ) with First Solar ( Developer and Thin Film Module Manufacture ) in USA . Although the PPA comes with has 3% annual escalation , but this doesn’t seem significant when compare to average price hike in cost of power production from convention energy sources . The Trend was clearly visible when Austin Energy  based out of Texas , USA presented the declining tariff at which they have signed PPA since 2008 and even saw decline of 20% in tariff in 1 year itself :

2008 – $0.16 /Kwh – 30-MW  Webberville Solar Project,

2014-  $0.05/Kwh – 50- MW Recurrent Energy solar project ( Sun Edison) 

2015-  $0.04/Kwh – 600 MW RFP response 

Even when federal Investment Tax Credit (ITC) are due to expire at the end of 2016 and it would have impact on future projects but with capital cost expected to fall … the overall raise would be minimal on net tariff in USA.

The fine details are yet to be disclosed but it surely proves to a encouraging point for more and more investment diverting to Renewable energy as its dependency on Tax holidays and state subsidy reduces .  In India INR 5.05 is the lowest tariff report by Skypower Holding ( a Canadian Venture ) in MP ( Click here to read the article ) and soon to be opened Telengana Solar Tender is now being watched by Industry Expert which even consider MP tariff rates as financially Nonviable considering capital cost of INR 5.5 Crore / MW ( Benchmark Set by CERC ) assuming debt funding at around 11 -13 % which leads to single digit IRR with standard assumptions.

It would be interesting to watch how low the PPA rates goes before settling down and would sun power will actually become free or close to FREE very soon in future .

Sources for the article :

* { Figures Can be approximate at some places } 


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