The significant drop in solar power projects in the past few months is a reflection of huge pent-up demand in the system, according to Sunil Jain, CEO and ED of Hero Future Energies Ltd. Speaking on the sidelines of a CII meet on rooftop solar projects here on Tuesday, Jain said, “I am keeping my fingers crossed. You may see a lower price offer in the latest bidding process, which is now under way at Bhadla in Rajasthan. This may see a new low once the reverse bidding process is completed.”
For a 750 MW solar power project, the bidding process now under way has seen bids for over 8000 MW, that is bids are more than 10 times of what is on offer. This shows that investors and developers are keen to be part of projects that ensure proper returns, he said. “I will not be surprised if the rates go below ₹3 per unit. Eventually, the prices may settle down at ₹2.80 or ₹2.90 per unit,” he said. The lower prices have been aided by a number of factors, including drop in module rates globally, lower cost of funding, and the assured returns on investment.
This is also one of the reasons the government has doubled the solar parks target from 20 gigawatt to 40 GW, Jain said. “In less than four years of operations, we have an installed capacity of 600 MWof renewable energy. This is expected to cross one GW by August 2017. In addition, we have installed 20 MW of rooftop solar thus far and planning to take this up to 60 MW. Another 35 MW is in pipeline,” Jain said. “Our plan is to take the installed capacity to 2,500 MW by 2021. This growth has been well planned and funding is also no issue. We had raised about $ 125 million from IFC and have adequate recourse to debt,” he added.Bright outlook
“The outlook for renewable energy sector is bright as both solar and wind power projects are close to grid parity. This will enthuse more developers to take to renewable energy,” he said. “However, there is one concern and I hope it will be redressed over the next couple of years. That is the demand pick-up is not on expected lines. Once the economy gains further momentum, the demand for power is also likely to go up,” he said.