Projects With Tariff of ₹4.63 Seems Like A Luxury

A few factors contributing to this trend are low cost of funding; eagerness to enter Indian solar market due to weak markets in other regions, suggests Abhay Raina, Head Solar, Hero Future Energies

- Rahul Kamat 

What factors are involved considering the decline is over 25% since mid-2015?

There has been considerable change in the way we are designing our plants now. Every element is getting optimised and more competent. Decline in module prices have played a vital role. Also, guaranteed off-take contributed to this and gave confidence to the developers to invest in solar parks. We have observed that several foreign players have been bidding aggressively. Few factors contributing to this trend are low cost of funding; eagerness to enter Indian solar market due to weak markets in other regions. Scrapping of few NTPC projects also may have contributed to this drop in tariffs. 

Given such drastic tarrif decline, have investors adequately calculated and provided risk free funds?

I don't feel any investor would bid aggressively just to win and would have taken all precautions to see that their expectation of Internal Rate of Return (IRR) is sustainable. Few companies that are funded by foreign private equities (PEs) may take a more aggressive stance in future bids also. 

Private sector players with long-term PPAs have problems with discoms. Do you think this has been examined?