Solar tariffs in India hit a record low of INR2/kWh (US$0.0270/kWh) following an auction this week for 1,070MW of PV projects that are set to be developed in the state of Rajasthan.

The Indian unit of Singapore’s Sembcorp Industries and Saudi Arabia-based Aljomaih Energy and Water Company posted the record bids in the auction carried out by the Solar Energy Corporation of India (SECI). The prices represent a 15% reduction on previous lowest bid for solar power in India from another auction held by SECI earlier this year.

Sembcorp’s Green Infra Wind Energy and Aljomaih Energy and Water Company won 400MW and 200MW respectively. The remaining 470MW of capacity was secured by NTPC, India’s largest power company, following its bid of INR2.01/kWh.

Most offers submitted by the 14 companies participating in the auction were also below India’s previous record bid, with the tender oversubscribed by 3,280MW.

Vinay Rustagi, managing director of Bridge to India, said the while the auctions produced a “sensational result”, the winning bids fell below INR2.31/kWh, a tariff which the consultancy firm deems to be reasonable.

“The winning tariffs are extremely aggressive, and we don’t believe that there is any operational or financial justification for these,” he said.

NTPC’s participation in the auction comes months after the state-owned power company revealed plans to add more than 5GW of solar capacity in the next two years and increase its renewables output to 30GW by 2030.

While the auction results represent a new low tariff for India, the winning prices remain far higher than the lowest bid seen in Portugal’s record-breaking solar auction earlier this year.