Resolving the solar tariff war

Legally binding power purchase agreements with no revision clauses cannot be renegotiated

Solar Photovoltaic (PV) projects have witnessed rapidly declining prices in India over the past two years (See chart). Experts and industry representatives have raised eyebrows and questioned the sustainability of such aggressive bidding. The central government has made strong statements about how solar power has reached grid-parity and will continue to receive heavy support and propel India to be a global leader in solar power. The winning companies have attributed the low rates to the sharp fall in global PV module prices, low cost of finance from foreign investments and low risk hedging because of the offtake guarantees provided by