Main Key Factors behind the Recent Fall of Solar Power Tariffs in India

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An analysis by India Ratings and Research says improvements in PV panel designs and costs, lower financing costs and state-specific sectors, such as the location’s solar potential and certain waivers, have driven the decline in Indian solar tariffs.

An India Ratings and Research report attributes the continuous decline in Indian solar power tariffs since the start of FY2020-21 to a mix of structural and state-specific factors.

State-specific factors impacting the tariffs in the latest round include an exemption of INR0.2 million/MW of cess levied by the Rajasthan government on project development in the state.

Safeguard duty exemption on panel imports is another factor driving cost reduction, according to the rating agency.