L&T to set up new bench mark in solar EPC prices

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L&T is all set for development of standards and new bench mark in solar EPC prices. The company has bagged orders for putting up projects worth 10 MW for  Rs 1250 million to Rs 125 million per MW, says a Hindu Business Line report

L&T does not own solar plants but it is recognised as one of the leading companies in setting up plants for other organistions on turnkey basis. It currently has an order backlog of Rs 3.5 billion.

This comes at a time when  Rs 90 million per MW has come to be viewed as a benchmark for the industry, with expectations for further decrease in costs.

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For instance, rating agency Crisil has said that it expects the pace of decline in module prices to slow down in 2012. It said that “capital costs are expected to decline only 10-13 per cent (emphasis added) to Rs 86.9 million from Rs 90 million per MW in 2012.”

Asked about this, Shaji John, chief,  solar initiatives, Larsen & Toubro Ltd said that the price of Rs 1250 million per MW is a culmination of scope, specifications, terms and conditions.

He said that due to non-disclosure agreements, L&T could not divulge the names of the customers or the project specifications. John said that “However, to just give an example, if we use trackers with high efficiency modules, the cost goes up significantly but also improves the generation that helps the developers’ financials.”

The higher per MW prices secured by L&T “indicates that the market is maturing and discerning customers are not averse to paying a higher price for better life-cycle cost advantages,” says Vineeth Vijayaraghavan, founder and editor, Panchabuta a renewable energy newsletter.

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