Paradox between perspectives of reverse auction process for allotment of solar PV projects in India.

• Two perspective for reverse auction process for allotting solar projects in India. • This process can be justified considering financial burden on utility companies. • This process can be justified due to possibility of creating NPA in utility companies. • This process can be justified as it brings cost efficiency. • This process can be countered with its direct impact on macroeconomic condition. Since 2009, the central government and many state governments of India have introduced policies to promote solar PV technologies. The key feature of these policies is allotment through reverse auction process. Although, it has been claimed that through this process, the tariff of power from solar PV has been brought down significantly, question regarding the viability of solar PV project at such low tariff is also being raised. In this paper, paradox between favoured perspective and counter perspective of reverse auction process is elaborated. The favoured perspective is analysed with defending arguments such as poor financial health of utilities companies in India and danger of them becoming non-performing assets (NPA), low affordability of electricity by average customer and possibility of bringing better cost efficiency. The counter perspective is analysed with its effect on macro-economic condition of country, monetary policy, and trade balance and energy security. [ABSTRACT FROM AUTHOR]