tender

500 MW Rooftop Solar SECI tender results: Price Discovery (CAPEX)

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The recent results of the 500 MW Rooftop Solar Tender by SECI may have been a bit of an eye opener for EPCs in the Rooftop Solar Market in terms of the prices they must quote.

To give you a brief, the SECI tender had three main parts: Part A, Part B and Part C. For this article, we will only be analysing price discovery for CAPEX Projects (Part A and Part C).

Part A:

Size: 25 kWp- 500 kWp

Project Type: CAPEX

Bid Capacity: 500 kWp/ state

This mainly confers with Institutional and Social Sector, since typically residential plants are smaller than 25 kWp.

 

Part B:

Size: 25 kWp- 500 kWp

Project Type: RESCO

Bid Capacity: 2 MWp/ state

This confers with PPA projects with agreements between Investor and the buyer who maybe a Commercial, Industrial, Institutional or a Residential client. Although, we are yet to see where PPAs are happening at a scale as small as selling to a residential client.

 

Part C:

Size: Upto 25 kWp

Project Type: CAPEX

Bid Capacity: 100 kWp/ state

This is almost specifically for residential customers where the minimum bid capacity per state needs to be 100 kW.

Discovered prices for key states:

discovered-prices

So the range of the discovered prices lies between INR 53,000 to INR 64,123 for Part A (among the key states) and INR 57,000 and INR 67,500 for Part C. Maharashtra allows for maximum margins that can be drawn from each project topping in each Part A and Part C.

Analysis

This has a larger implication in the Rooftop Solar Sector in terms of benchmarking costs. After the previous benchmarking by CERC for individual components, this is a type of a benchmarking for overall project costs. With the benchmarked costs falling to a maximum of INR 67,500 in these key states, there is some room for breathing for project execution especially with the recent slump in module prices (refer). The recent results of the tender reflect a market now moving towards more realistic execution of projects. We now see both end users and EPC companies stepping in to make the 100 GW target work. This price discovery is almost a win-win. However, INR 57,000 in Part C for Delhi-NCR seems a bit hard to match- especially for residential projects. In my opinion, this is not an appropriate reflection of the actual project cost. So, for the smaller scale projects- these discovered prices are not in line with reality.

All in all, what I can draw from this Price Discovery is that bidding now is beginning to reflect the reality of costs involved in setting up a solar power plant. And in future bids, we hope to see this more and more.

Tanya Batra

Tanya keeps a close track of policy updates in the field of Rooftop Solar in India and likes to write blogs on its application for the end customer

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