KATHMANDU: Solar power producers have demanded that the government maintain the previous rate of Rs 7.30 per unit for solar energy. Submitting a memorandum letter to the Managing Director of Nepal Electricity Authority (NEA), Kulman Ghising, the Solar Electric Manufacturers Association Nepal (SEMAN) demanded that the NEA revise the solar power purchase price up to Rs 7.30 per unit, from the existing Rs 5.94 per unit.
The NEA called for bids on November 28, with a maximum rate of Rs 5.94 per unit of solar power. Responding to the call, the promoters said that the rate specified in the tender called by the NEA was not scientific, adding that investment in solar projects will not be viable to sell electricity at that rate.
According to SEMAN officials, said given the rate solar project will not be economically feasible considering project cost, the interest rate of the loan, depreciation, return on equity investment, operation and maintenance expenses, and tax, among other costs.
In the letter, SEMAN said that the cost of constructing a solar power project in the tender called by NEA is estimated at Rs 71.5 million, which is determined based on the energy market of India and not for Nepal. According to solar power developers, the cost of land in India is far cheaper than in Nepal, and the size of the projects is also between 500 MW and 1000 MW in the southern neighbor.
Similarly, according to the NEA’s estimated cost, the interest rate of banks and financial institutions has been set at 10 percent, but the current interest rate has reached 13 percent. At a time when the Indian government has been offering Rs 8 per unit of solar energy, solar project developers said that the existing rate set by the NEA is ‘impractical and short-sighted’.