Andhra Pradesh is considering the possibility of a uniform tariff of about Rs 6.49 a unit for solar photovoltaic power projects.
Following a detailed review of the various aspects of the bidding process, a Cabinet sub-committee on power seems to be considering offering this price range as a uniform tariff for the developers.
The decision was taken here on Tuesday at a meeting chaired by Finance Minister Anam Ramnarayan Reddy.
The State through AP Transco as the nodal agency had invited bids from private developers to set up solar PV units aiming to develop about 1000 MW.
In the process, about 331 bids for development of 1,780 MW were received.
Developers will be given 30 days to respond to the proposal.
PVR Krishna Rao of Earthcare based in Chennai said that the tariff offered by Andhra Pradesh is lower than what developers will eventually get in Tamil Nadu.
So it is to be seen how developers will take to such a tariff offer in Andhra Pradesh.
If one were to compare the rates offered by Andhra Pradesh and Tamil Nadu, the picture changes.
Tamil Nadu had offered Rs 6.48 a unit with escalation facility of 5 per cent over 10 years. This leads to a levellised tariff of Rs 7.75 a unit.
Narendra Surana, Managing Director of Surana Ventures, said this tariff was not workable as global prices have seen nearly 15-20 per cent upside in the past couple of months.
If this goes through the response will be much below 1,000 MW planned, he felt.