Azure Power reports fall in cost per deployed megawatt but still slips to loss

Azure Power Global saw its cost of deploying solar fall by nearly 19% last year, but the company still recorded a net loss of US$38.1 million in the quarter ending 31 March 2021 despite a year-on-year increase in revenue.
In reporting its fourth quarter results today, Azure said that its cost per MWdc of operating solar had fallen by around US$90,000 over the course of the last year, reaching around US$390,000 per MWdc by the end of its financial year.
This reduction was attributed almost entirely to the ongoing reduction in solar module costs, and Azure also noted that the reduction in module costs would have been more marked had it not been for safeguard duties introduced by India’s government last year, which attached punitive tariffs to imports from China.
Furthermore the company gave no insight into cost increases since the end of the reporting period. In recent months solar module prices have soared, anecdotally by as much as 25%, on the back of soaring material and logistics costs.
Azure attributes its loss in its final quarter to an impairment loss of assets costing the company US$44.5 million, although this was partially offset by a reversal of stock appreciation rights to the tune of US$7.7 million.
The India-based independent power producer (IPP) increased its generation capacity by 20% on 2020, operating just over 1.99GW as of 31 March 2021, however this amounts to a marginal increase on the 1.98GW operated as of the company’s third quarter, which ended 31 December 2020.
The IPP’s pipeline, which includes total operated, contracted and awarded assets, reached 6.9GW at the end of the quarter, with contracted and awarded projects making up 4GW of this.
Of that 4GW, letters of award (LOA) have been received but power purchase agreements (PPAs) are yet to be signed by the Solar Energy Corporation of India (SECI). SECI has said it will be unable to sign PPAs until power sale agreements (PSAs) have been signed, and Azure said discussions with SECI towards the signing of PPAs are ongoing.