BENGALURU: Solar tariffs hit their record low of Rs 2.44 per unit yet again on Monday in a 500 MW auction held by the Gujarat Urja Vikas Nigam Ltd (GUVNL), indicating that the impact of safeguard duty is not yet being passed on by developers. Giriraj Renewables, part of Avaada Energy, emerged as the biggest winner getting 300MW at Rs 2.44 per unit. Aditya Birla Renewables won 100MW at the same tariff while Azure Power got 100MW at Rs 2.45 per unit. “The duty has not been taken into account, or else this would be considered an aggressive tariff,” said a banker who finances renewable energy projects. “This being a state-level auction, developers would not go for aggressive tariffs.”The finance ministry last week had reinstated safeguard duty on solar panels and modules imported from China and Malaysia. The Directorate General of Trade Remedies (DGTR) had initially imposed safeguard duty of 25% for a year from July 30, followed by 20% for the next six months and 15% for another six. This was challenged in the Orissa High Court and successfully stayed pending a verdict, but last week the Supreme Court vacated the stay. In its order, the DGTR had maintained safeguard duty was necessary to protect the local solar manufacturing industry, which had suffered “serious injury” due to imports. More than 90% of solar panels and modules used in Indian projects are imported since domestic manufacturers cannot match Chinese and Malaysian prices.The record tariff of Rs 2.44 per unit has been reached twice before, both in auctions conducted by the Solar Corporation of India (SECI), the first time in a 500 MW auction May 2017 and the next in a 2400 MW auction in July this year.GUVNL had cancelled its last solar auction of 500 MW held in March this year without citing any reasons. Industry sources believed this was because it felt that the lowest tariff reached at the auction, of Rs 2.98 per unit, was too high. With Monday’s auction, it has thereby succeeded in lowering the price by more than 50 paise per unit. The tariff reached is also lower than that at the last solar auction – held by NTPC in August for 2000MW of projects, where winning tariffs were in the range of Rs 2.59-2.60 per unit.
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