Karnataka Sets New Generic Tariff for Solar Projects

The Karnataka Electricity Regulatory Commission (KERC) has issued an order setting the generic tariff for solar projects in the state for the period starting April 1, 2019, and ending March 31, 2020.

The commission has determined ₹34 million (~$480,500)/MW as the capital cost of large-scale solar projects in Karnataka. This is less than the proposed capital cost in June of ₹37.33 million (~$527,600)/MW for solar PV projects to be developed in the state. The capital cost for large-scale solar projects was set at ₹35 million (~$495,000)/MW in the previous year.

For grid-connected MW-scale solar projects of capacity less than 5 MW, the state has set a generic tariff of ₹3.08 (~$0.0435)/kWh. This is ₹0.03 (~$0.0004)/kWh more than the generic tariff of ₹3.05 (~$0.0431)/kWh set for solar PV projects of capacity up to 5 MW in 2018.

For grid-connected rooftop solar PV projects of capacity ranging from 1 kW to 2,000 kW, the generic tariff with subsidy has been set at ₹2.32 (~$0.0328)/kWh and the generic tariff without subsidy is ₹3.07 (~$0.0434)/kWh. The capital cost for such projects is determined to be ₹32,800 ($464)/kW.



For projects ranging from 1 kW to 10 kW, the generic tariff with subsidy has been set at ₹2.97 (~$0.0420)/kWh while the generic tariff without subsidy is ₹3.99 (~$0.0564)/kWh. The capital cost for such projects is determined to be ₹45,000 ($636)/kW. Earlier the generic tariff for this category of projects was ₹4.15 (~$0.06)/kWh (without capital subsidy), and the tariff with capital subsidy was ₹3.08 (~0.044)/kWh.

In 2018, the commission had set the generic tariff at ₹2.67 (~$0.0377)/kWh (with capital subsidy) for rooftop solar PV projects of 1 MW or less and ₹3.56 (~$0.0503)/kWh (without capital subsidy). Compared to last year, the tariffs have fallen drastically for large rooftop solar PV projects.

While determining the new generic tariffs, the commission considered the useful life of a solar project to be 25 years as the photovoltaic (PV) modules have a warranty of 25 years, this has been unchanged from the previous years. It has continued to consider a reduction of 0.5% of net generation as annual degradation from the fifth year onwards for MW-scale projects. The capacity utilization factor (CUF) will continue to be at 19%.

Karnataka - KERC Generic Solar Tariff Order

According to the Mercom India Solar Project Tracker, Karnataka has installed large-scale solar capacity of over 5.3 GW and has a development pipeline of ~2.5 GW, making it the leading solar state of the country.

Image credit: Azure Power