India, Jan. 23 -- Disregard for power purchase agreements willaffect sector's sustainability

Solar and wind energy developers sign a contract with a power purchaser - mostly distribution companies (discoms) - for a prescribed period (typically 25 years) at a particular tariff rate per unit, which is based on the capital cost, land costs as well as other operations and maintenance (O&M) costs for the supply of all the generated power.

Every project has its own economics and the contract is signed based on these costs.

Due to advancements in technologies, the price of equipment is decreasing fast. Therefore, the cost of overall projects are decreasing at a fast pace, resulting in a more competitive market and cheaper tariff rates.

The l...