The The Joint Electricity Regulatory Commission (JERC) for the state of Goa and Union Territories (UTs) has announced the generic tariffs for solar photovoltaic (PV), wind and small hydro projects in Goa, and the UTs of Andaman & Nicobar Islands, Lakshadweep Islands, Puducherry, Daman & Diu, Dadra & Nagar Haveli, and Chandigarh.

The tariff order is effective from April 1, 2021, to March 31, 2022, or until further orders of the Commission, whichever is later. It will be applicable for the renewable energy projects commissioned during the year.

According to the regulations, the generic tariff determined by the Commission will act as a ceiling tariff. To procure renewable power, the distribution licensee will have to file a petition for the adoption of tariffs under Section 63 of the Act.

For renewable energy technologies like biomass power projects with fuel cost components, the single-part tariff will carry two components: fixed cost component and fuel cost component.

The Commission also pronounced that the generic tariff would be determined based on the year of commissioning of the project, on a levelized basis for the tariff period. The body further noted that to compute levelized tariff, the discount factor equivalent to a post-tax weighted average cost of capital would be considered.

Solar PV Projects

For solar (gross metering) projects, the Commission considered the useful life as 25 years. The normative capital cost for solar projects in the mainland areas without capital subsidy is considered as ₹50 million ($674,000)/MW and ₹60 million ($810,000)/MW in island areas.

Debt to equity ratio of 70:30 of the capital cost is considered for the projects. The return on equity for the mainland areas is taken as 14% grossing up with an Alternate Minimum Tax (MAT) rate of 17.47%. The return on equity for the island areas is taken as 14%.

An interest rate of 9% and 10% is considered on the debt portion for mainland and island areas, respectively. The working capital interest rate is 10% and 11% for mainland and island areas, respectively.

The depreciation for the solar projects is calculated at a rate of 5.83% for the first 12 years and 1.54% subsequently for the remaining useful life of 13 years.

The operation and maintenance (O&M) expense for the first year is set as 1.5% of the capital cost for mainland areas and 2% for island areas. The escalation rate of O&M expenses for subsequent years is considered as 3.71% for the rest of the useful life of the project.

The above parameters are considered with a discount factor of 8.67% for mainland areas and 9.76% for island areas. The generic tariff for solar projects (gross metering) commissioned between the date of the issue of this order to March 31, 2022, is determined as ₹4.68 ($0.063)/kWh for Goa, Dadra & Nagar Haveli, Daman, Diu, Puducherry. For Andaman & Nicobar Island and Lakshadweep, it is considered as ₹6.75 ($0.090)/kWh and ₹4.96 ($0.067)/kWh for Chandigarh.

For solar projects commissioned up to March 31, 2021, the generic tariff was ₹4.82 ($0.064)/kWh for Goa, Dadra & Nagar Haveli, Daman, Diu, Puducherry. For Andaman & Nicobar Island and Lakshadweep, it was ₹6.94 ($0.092)/kWh and ₹5.10 ($0.068)/kWh for Chandigarh.

Wind Projects

For wind projects, the Commission considered the useful life as 25 years. The normative capital cost for wind projects in the mainland areas without capital subsidy was considered as ₹52.5 million ($709,429)/MW and ₹62.5 million ($840,000)/MW in island area of Andaman and Nicobar and ₹70 million ($940,000)/MW in Lakshadweep.

The other parameters are the same as what is considered for the solar projects.

The generic tariff for wind projects (gross metering) commissioned between the date of the issue of this order to March 31, 2022, is determined as ₹4.92 ($0.07)/kWh for Goa, Dadra & Nagar Haveli, and Chandigarh. For Daman, Diu, and Puducherry, it is considered as ₹4.66 ($0.06)/kWh, ₹3.40 ($0.05)/kWh, and ₹4.21 ($0.07)/kWh, respectively.

For Andaman & Nicobar Island and Lakshadweep, it is considered as ₹6.65 ($0.09)/kWh and ₹6.70 ($0.09)/kWh.

For wind projects commissioned up to March 31, 2021, the generic tariff for Goa, Dadra & Nagar Haveli, and Chandigarh was ₹5.06 ($0.07)/kWh. For Daman, Diu, and Puducherry, it was ₹4.79 ($0.064)/kWh, ₹3.50 ($0.047)/kWh, and ₹4.34 ($0.058)/kWh in that order.

For Andaman & Nicobar Island and Lakshadweep, it was set as ₹6.83 ($0.091)/kWh and ₹6.88 ($0.092)/kWh.

Small Hydro Projects

For small hydro, the Commission considered the useful life as 35 years. The normative capital cost for small hydro projects in the mainland areas without capital subsidy was considered as:

• Below or equal to 5 MW – ₹9 million (~$1.05 million)/MW
• Above 5 MW and below or equal to 25 MW- ₹7 million (~$956,095)/MW

Projects in island areas:

• Below or equal to 5 MW- ₹105 million (~$1.41 million)/MW
• Above 5 MW and below or equal to 25 MW- ₹90 million (~$1.2 million)/MW

The depreciation for the small hydro projects is calculated at a rate of 5.83% for the first 12 years and 0.87% subsequently for the remaining useful life of 23 years.

The generic tariff for small hydro projects (gross metering) commissioned between the date of the issue of this order to March 31, 2022, is ₹4.49 ($0.06)/kWh for projects below or equal to 5 MW on the mainland. For projects above 5 MW and lower than or equal to 25 MW, the generic tariff is ₹4.08 ($0.05)/kWh.

For small hydro projects in islands, the generic tariff is ₹6.89 ($0.09)/kWh for projects below or equal to 5 MW. For projects above 5 MW and lower than or equal to 25 MW, the generic tariff is set at ₹5.91 ($0.08)/kWh.

In comparison, for small hydro projects commissioned up to March 31, 2021, the generic tariff was ₹4.63 ($0.062)/kWh for projects below or equal to 5 MW on the mainland. For projects above 5 MW and lower than or equal to 25 MW, the generic tariff is ₹4.21 ($0.056)/kWh.

For small hydro projects in islands, the generic tariff was ₹7.09 ($0.094)/kWh for projects below or equal to 5 MW. For projects above 5 MW and lower than or equal to 25 MW, the generic tariff is set at ₹6.08 ($0.081)/kWh.

Recently, the JERC also determined the levelized tariff for ground-mounted and rooftop solar projects in Daman & Diu.

For rooftop solar projects installed from July 2019 to March 2020, a levelized tariff for ground-mount solar projects of 1-3 MW, a tariff of ₹6.31 ($0.08)/kWh is determined, and the tariff of a ground-mount solar project of 6 MW capacity is set as ₹5.97 ($0.08)/kWh.