MERC Asks DISCOM to Reduce ₹0.18_kWh from Solar Tariff to Account for Safeguard Duty

The Maharashtra Electricity Regulatory Commission (MERC) has set the generic tariff for solar photovoltaic (PV) projects at ₹3.29 (~$0.047)/kWh for FY 2019-20. This order will apply from April 1, 2019, to March 31, 2020.

According to the commission, this tariff will be applicable for projects where the cost of land and evacuation infrastructure has been included in the capital cost and not provided free by the power purchaser.

The current generic tariff for solar PV is ₹0.57 (~$0.008)/kWh more than the generic tariff of ₹2.72 (~$0.04)/kWh for solar PV that was set for FY 2018-19. The current generic tariff is based on the results of competitive bidding conducted by the Maharashtra State Electricity Distribution Co. Ltd (MSEDCL).

Moreover, the commission has fixed ₹3.79 (~$0.054)/kWh as the generic tariff for rooftop solar projects. This tariff will not apply to rooftop solar projects covered under the MERC regulations for net metering.

This generic tariff for rooftop solar PV projects for FY 2019-20 is ₹0.57 (~$0.0081)/kWh more than the generic tariff of ₹3.22 (~$0.04609)/kWh that was fixed for FY 2018-19.

According to the MERC, if no safeguard duty is paid by a solar PV project developer in spite of import from China or Malaysia, then ₹0.18 (~$0.0025)/kWh will be deducted from the generic tariff of the projects.

The generic tariff for wind energy projects has been fixed at ₹2.52 (~$0.0362)/kWh for FY 2019-20, based on the result of the wind auction conducted by MSEDCL.

This is ₹0.35 (~$0.0050)/kWh less than the generic tariff of ₹2.87 (~$0.04108)/kWh for wind projects in FY 2018-19. This fall is a result of the decline in wind power tariffs in India in subsequent auctions since 2016 when reverse auctions were introduced in the sector.

Moreover, the commission has considered the useful life of small hydro projects (SHPs), including micro-hydro projects to be 35 years.

The commission has fixed the tariff for biomass projects at ₹7.83 (~$0.1126)/kWh with accelerated depreciation of ₹0.15 (~$0.0021)/kWh. There is a fixed price component at ₹2.28 (~$0.0327)/kWh while the variable charge is at ₹5.55 (~$0.0798)/kWh.

The MERC has also fixed the generic tariff of solar thermal projects at ₹11.15 (~$0.1603)/kWh with accelerated depreciation of ₹0.91 (~$0.0130)/kWh.

Maharashtra became the third state after Bihar and Tamil Nadu to issue ‘Renewable Energy Tariff Order’ in April 2019.

In March 2019, the Central Electricity Regulatory Commission (CERC) had set generic tariffs for the purchase of electricity from a host of renewable energy generation sources for FY 2019-20.

Image credit: RESOL


Saumy Prateek Saumy is a senior staff reporter with covering business and energy news since 2016. Prior to Mercom, Saumy was a copy editor at Thomson Reuters. Saumy earned his Bachelors Degree in Journalism & Mass Communication from the Manipal Institute of Communication at Manipal University. More articles from Saumy Prateek.