And here comes the news that Azure has bagged a 150 MW solar power plant from NTPC in AP, at Rs 5.12/kWh. (#Update based on a comment to this post – Azure = 100 MW, the rest 50 MW has been bagged by Adani Power @ Rs 5.13/kWh).

This is part of the same series of solar power allocation by NTPC in AP that saw tariffs from Sun Edison (500 MW) and Softbank (350 MW), at an identical rate of Rs 4.63/kWh. All these projects will be built at the solar part in Kurnool where NTPC is targetting a total of 1000 MW of solar power plants.

Now, Rs 5.12/kWh is just above 10% higher than 4.63, so is there a reason behind this increase?

Well, this allocation is slightly different from the other two in that this comes under the DCR category, in which the cells and panels to be used in the power plants need to be manufactured in India.

Now, the DCR condition applies only to cells and modules as of now. Interestingly, it is mainly these two that are imported for most solar power plants in India today.

And, perhaps not too coincidentally, Indian modules cost about 10% higher than imported modules.