Rajasthan Sets ₹3.14_kWh as Levelized Tariff for Solar Projects Under KUSUM Program

The Rajasthan Electricity Regulatory Commission (RERC) has set the pre-fixed levelized tariff for Component-A of the Pradhan Mantri-Kisan Urja Suraksha Evan Utthan Mahabhiyan (PM KUSUM) program at ₹3.14 (~$0.044)/kWh. The Commission added that the set tariff adequately reflects the higher cost for small-sized projects.

The MNRE launched the guidelines for the implementation of PM KUSUM scheme on July 22, 2019, with the following components:

  • Component A: Set up 10 GW of decentralized ground-mounted grid-connected solar projects of individual project size up to 2 MW
  • Component B: Install 1.75 million standalone solar-powered agriculture pumps of individual capacity up to 7.5 HP
  • Component C: Solarize 1 million grid-connected agriculture pumps of individual capacity up to 7.5 HP

Besides this, under the Component C of the program, the rate for the purchase of excess power by distribution companies from grid-connected solarized agriculture pumps has been set at ₹3.44 (~$0.047)/kWh. This tariff will be applicable for the entire useful life cycle of the solar pumps set up under the program.

The Commission has added that DISCOMs can explore the feasibility of grid-connected solarized agriculture pumps only in areas with smaller pump size and hours of use to make full use of the central financial assistance. For better outcomes, the state body has suggested that DISCOMs can try out Component-C in different climatic zones and areas with varying crops within Rajasthan.


While arriving at the tariff for Component-A, the Commission considered the cost adopted by other states and also looked into the tariff of large-scale projects which is in the range of ₹2.44 (~$0.033)/kWh to ₹2.70 (~$0.037)/kWh.

If the aggregate capacity offered is more than the notified capacity for any substation, the pre-fixed levelized tariff will only act as the ceiling tariff for bidding, the Commission noted. Further, the DISCOMs are free to file suitable petitions for redetermination of the Levelized cost.

The duration of the power purchase agreement will be 25 years for all projects covered under this program.

The Commission said that the tariff and other conditions stipulated under this order would remain applicable for the capacity initially allocated to the State by MNRE under the Component-A and number of consumers under the Component-C of the program.

Recently, the MNRE asked states to prepare innovative business models for implementing the KUSUM program. Citing the example of business models for the solarization of pumps adopted in Haryana, Gujarat, and Maharashtra, the MNRE had asked other states to follow suit. In November last year, MNRE had issued guidelines to implement Component-C of the program.

Image credit: Prabuddha Raj / CC BY-SA