India’s Maharashtra state has launched a process to procure a major slice of grid-linked solar power, pushing for low prices in line with earlier tenders this year.

This week, electricity distributor Maharashtra State Electricity Distribution Company Limited (MSDECL) shared a notice inviting online bidders for up to 500MW in grid-connected PV projects.

The reverse e-tender, open until 17 September, will be used to hand out 25-year power purchase agreements (PPAs) with MSDECL among winning projects.

Bids will require bank guarantees of INR1.4 million/MW (US$19,497/MW) and will face a ceiling price of INR2.8/kWh (around US$0.039/kWh), the new tender documents show.

The tariff cap falls below bid prices at a tender held earlier this year in 116-million-inhabitant Maharashtra, India’s most second populous state and the home of the city of Mumbai.

In May, the state recorded tariffs of INR2.87-2.91/kWh (around US$0.041/kWh, based on exchange rates at the time) for a 250MW auction, which drew bids from Tata Power and others.

Speaking to PV Tech at the time, Vinay Rustagi, managing director of consultancy firm Bridge to India, conveyed his “surprise” at what he described as “aggressive” tariffs.

"This is a challenging site – relative lower irradiation, forest land, difficult access – and has high solar park charges. There was limited bidding interest,” Rustagi added.

The new tender’s INR2.8/kWh tariff cap also lies in the region of the INR2.71/2.72kWh and INR2.74-2.75/kWh average bids recorded at Maharashtra’s two earlier 1GW state solar auctions, held in May 2018 and February 2019.

Maharashtra’s solar tendering efforts come as the Indian industry heads – if predictions by Fitch Solutions come to pass – towards a boom between 2018 (26GW) to 2028 (105.9GW).