AP fixes solar power price at Rs 6.49 per unit

State's FM says those willing to sell power at govt determined price are welcome to submit their proposals within 30 days

In December last year, the government had announced a solar power development policy with a commitment to purchase 1,000 Megawatt from solar power

The Andhra Pradesh government has fixed Rs 6.49 per unit as the procurement price of power from the upcoming solar power projects in the state.

A cabinet-subcommittee headed by finance minister Anam Ramanarayana Reddy announced the decision on Tuesday. The minister said those willing to sell power at the government determined price were welcome to submit their proposals within 30 days.

"We have arrived at this price after studying the procurement policies adopted by states like Rajasthan and Tamil Nadu," Hiralal Samaria, chairman and managing director of APTransco, the umbrella organisation of the state power utilities, told Business Standard.

In December last year, the government had announced a solar power development policy with a commitment to purchase 1,000 Megawatt from solar power. Subsequently, APTransco had invited bids for setting up solar projects with a capacity of between 1Mw and 5Mw at select electric sub-stations across the state.

About 330 companies and individuals, including some big names like Lanco, have submitted bids by quoting up to Rs 16 per unit as there was no benchmark price indicated by the government. Some reports said the average of all the price bids stood a little over Rs 8 per unit. Against this backdrop, the procurement price announced by the state government comes as a surprise for many prospective developers.

On whether the utilities would be able to attract developers willing to sell power at Rs 6.49 per unit to the extent of 1,000 Mw, Samaria said they would have to wait for the actual response.