New Delhi: Tariffs for solar power have fallen to record lows below Rs3 per kilo-watt hour, providing a boost to the National Democratic Alliance’s green energy drive.

Renewable energy producers quoted the prices, at which they will sell solar power, to win contracts to develop the world’s largest solar power plant of 750 MW in Rewa, Madhya Pradesh, on Friday.

Mahindra Renewables Pvt. Ltd, Acme Solar Holdings Pvt. Ltd and Sweden’s Solenergi Power Pvt. Ltd bid Rs2.979 per kWh, Rs2.97 per kWh and Rs2.974 per kWh respectively to win contracts to build 250MW plants each, according to several people aware of the bid prices.

Piyush Goyal, India’s minister for coal, power, mines and new and renewable energy, said in a tweet that the first-year solar tariff bid of Rs2.97 per unit was a record low.

Under the Rewa contracts, there will be 5 paise per annum escalation in tariff for 15 years. A so-called levelized tariff—the value financially equivalent to different annual tariffs over the period of the power purchase agreement (PPA)—of around Rs3.30 per unit will be levied.

The last discovered lowest tariff for a solar power project in India was Rs4.34 per unit.

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