June 13 (Bloomberg) -- Solairedirect SA, a French developer that won an Indian solar project with a record-low bid, said India offers greater cost savings than expected for investors in sun-based power.
The Paris-based company, which completed its first 5-megawatt plant in India in February, found that local suppliers of structural and engineering services were more competitive than expected, prompting it to consider ways to drive down costs in Europe as well, said Gaurav Sood, managing director of Solairedirect’s India unit.
“It made us re-look at our projects in Europe,” Sood said today in a phone interview from New Delhi. “We’re even considering looking at exporting from India.”
India is using competitive auctions to push down solar power rates to try to avoid the surging renewable subsidies burdening governments in Europe. Solairedirect won its project in a December 2011 auction after pledging to sell electricity from the facility at 7,490 rupees ($129) a megawatt-hour, about 30 percent cheaper than the world average at the time.
Sood said assembling equipment in India from Chinese components, “favorable payment terms” from suppliers, as well as a novel approach to financing helped contain costs.
Websol Energy System Ltd., based in Ramnagar, supplied the cells and modules using imported wafers from China’s Renesola Ltd. The finished product is insured by California’s PowerGuard Specialty Insurance Services, Sood said.
Solairedirect was able to raise affordable loans from the State Bank of India by paying upfront for the plant and applying for post-construction funding to refinance the project. “We got financing the day the plant was commissioned,” he said.
Solairedirect plans to bid for further projects in India at even lower rates, Sood said. It’s participating in an auction in northern Punjab state for 20 megawatts of capacity and may bid for as much as 50 megawatts in a tender later this year by the national government.
The company targets building a portfolio of as much as 400 megawatts in four years followed by the possibility of selling shares in an initial public offering, Sood said.
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