Generic Tariff of Solar PV Projects Proposed to be Reduced to ₹4.04kWh in Uttarakhand

The Uttarakhand Electricity Regulatory Commission (UERC) has issued a draft proposal to review the benchmark capital cost and generic tariff for solar photovoltaic (PV), solar thermal, and grid-interactive rooftop solar and small solar PV projects. This is applicable for the financial year (FY) 2021-22 and onwards until reviewed by the Commission.

The last date for submission of comments and suggestions by stakeholders is August 23, 2021.

Background

On June 7, 2019, the Commission set norms for the benchmark capital cost for solar PV, solar thermal and grid-connected rooftop solar, and small solar PV projects.


However, on May 5, 2020, the Commission, after taking cognizance of the Covid-19 pandemic, which had the stalled global supply chain of solar modules, extended the validity of the levelized generic tariff until September 30, 2020, which was further extended up to March 31, 2021.

The Commission observed changes in capital cost with the passage of time and upgradation of technologies in solar projects and decided to lay down the norm for the benchmark capital cost for solar PV, solar thermal and grid-connected rooftop solar, and small solar PV projects to be commissioned during FY 2021-22.

Solar PV Projects

The Commission has proposed the capital cost of ₹32.19 million (~$433,660)/MW for solar PV projects to be commissioned on or after April 1, 2021. The detailed breakup of the capital cost approved by the Commission for FY 2019-20 and that proposed for FY 2021-22 is as follows:

UERC Benchmark Capital Cost of Solar PV Project Approved for FY 2019-20 and Proposed for FY 2021-22

The Commission has considered the currently available cost of solar modules from April 2021 to July 2021 to determine benchmark capital cost. With the average cost of $0.209/W for silicon and thin-film solar modules and an exchange rate of ₹73.842/$ based on the average of April 2021 to July 2021, the cost of Solar PV modules works out to ₹19.36 million (~$260,882)/MW.

The Commission has proposed the same land cost for considered for solar projects from FY 2018-19 and FY 2019-20, i.e., ₹5 million (~$67,358)/MW for FY 2021-22.

Solar Thermal Power Projects

The Commission has proposed to adopt the benchmark capital cost as ₹120 million (~$1.61 million)/MW for solar thermal projects to be commissioned on or after April 1, 2021.

Grid-Interactive Rooftop Solar and Small Solar PV Projects

The Commission, while determining the benchmark capital cost for grid-interactive rooftop solar and small solar projects for FY 2021-22, has decided to categorize the benchmark capital cost and other technical parameters for such plants having capacity up to 10 kW, above 10 kW to 100 kW, above 100 kW up to 500 kW and above 500 kW and up to 1 MW.

The Commission proposes to allow 35% higher cost along with escalation with the average increase of whole price index (WPI) and consumer price index (CPI) of steel and cement for the preceding three years. Equal weightage has been given to components mentioned above for rooftop solar projects as compared to the solar PV projects having a capacity above 500 kW and up to 1 MW.

Given the above considerations, details of the capital cost approved for FY 2019-20 and details of the capital cost proposed for FY 2021-22 for grid-connected rooftop solar projects are as follows:

UERC Capital Cost and Tariff for Grid-Interactive Solar Projects

Revised Generic Tariffs

Based on the benchmark capital cost, the Commission has determined the gross generic tariff to be applicable for projects to be commissioned in FY 2021-22 at ₹4.04 (~$0.054)/kWh for solar PV projects and ₹13.69 (~$0.185)/kWh for solar thermal projects. Proposed tariffs for FY 2021-22 along with the applicable generic tariff for FY 2019-20 and FY 2020-21 for solar PV and solar thermal projects are as follows:

UERC Existing and Proposed Generic Tariffs for Solar PV Plants and Solar Thermal Plants

Accordingly, at the request of the Uttarakhand Power Corporation, the Commission has also worked out the tariffs for grid-connected rooftop and small solar PV projects considering an 80% subsidy. The proposed tariffs for FY 2021-22, along with the applicable generic tariff for FY 2019-20, are as follows:

UERC Existing and Proposed Generic Tariffs for Grid connected Rooftop & Small Solar PV Plants

Accordingly, the gross tariff (without subsidy) for rooftop and small solar PV projects up to 10 kW is ₹5.04 (~$0.068)/kWh; above 10 kW to 100 kW is ₹4.58 (~$0.062)/kWh; above 100 kW to 500 kW is ₹4.26 (~$0.057)/kWh; and above 500 kW to 1 MW is ₹4.07 (~$0.055)/kWh.

The proposed tariffs for solar PV, solar thermal, rooftop and small solar projects will apply to the projects commissioned on or after April 1, 2021, until further reviewed by the Commission. The tariffs determined will also be the ceiling tariffs and the power will be procured through a competitive bidding route by the distribution licensee.

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