Competitive bidding for the first 150 MW of large-scale Photovoltaic (PV) and 470 MW of Concentrated Solar Thermal capacity, under the Jawaharlal Nehru National Solar Mission, resulted in quotes that were on an average 25 and 32 percent lower than the Central Electricity Regulatory Commission declared feed-in tariffs for 2010 respectively. Following the low bids, there are some concerns that plants may not materialize due to potential underbidding and inexperience. However, relatively large bond amounts and government commitment to appropriate the same in the event of breach of contracts is a significant deterrent. Given the changing prices of solar and the limited paying capacity of India’s consumers and taxpayers, competitive bidding is an appropriate process for MW-scale solar power procurement. However, India’s strategic interests lie in the development of manufacturing and RD&D industry in India and decentralized solar installed capacity in rural areas where it will have the most social impact.

This article was published as a paper in the July 9th, 2011 issue of EPW.