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Germany Floats Tender for 282.7 MW Solar Projects

Daily News Wrap-Up: GST Reduction on Rooftop Solar Cuts Payback Period

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					</table>The Andhra Pradesh Electricity Regulatory Commission (<a href="https://aperc.gov.in/">APERC</a>) has approved the procurement of 1,162.8 MW of solar power for feeder-level solarization of agricultural feeders under Component C of the PM-KUSUM program.
The approval covers projects proposed by the Andhra Pradesh Southern Power Distribution Company (APSPDCL), the Andhra Pradesh Central Power Distribution Company (APCPDCL), and the Andhra Pradesh Eastern Power Distribution Company (APEPDCL).
While approving the procurement and long-term power purchase agreements, the Commission has set a ceiling tariff of ₹3.09 (~$0.034)/kWh for the power to be procured. It ruled that tariffs above this level will not be permitted, except in cases where developers can demonstrate that a portion of project expenditure was incurred before September 22, 2025, the date from which a lower GST rate on renewable energy equipment became <a href="https://www.mercomindia.com/project-development-to-become-cheaper-as-government-cuts-gst-on-solar-cells/" target="_blank" rel="noopener">applicable</a>. In such cases, the Commission allowed a proportionate tariff adjustment, subject to certification by a statutory auditor.
<a href="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/12/Tariffs-Adopted-by-APERC-for-APDISCOMs-1162.8-MW-Solar-Power-Projects-under-Component-C-of-PM-KUSUM-Program.png"><img loading="lazy" decoding="async" class="aligncenter wp-image-88098 size-full" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/12/Tariffs-Adopted-by-APERC-for-APDISCOMs-1162.8-MW-Solar-Power-Projects-under-Component-C-of-PM-KUSUM-Program.png" alt="Tariffs Adopted by APERC for APDISCOMs' 1,162.8 MW Solar Power Projects under Component C of PM KUSUM Program" width="553" height="385" srcset="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/12/Tariffs-Adopted-by-APERC-for-APDISCOMs-1162.8-MW-Solar-Power-Projects-under-Component-C-of-PM-KUSUM-Program.png 553w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/12/Tariffs-Adopted-by-APERC-for-APDISCOMs-1162.8-MW-Solar-Power-Projects-under-Component-C-of-PM-KUSUM-Program-300x209.png 300w" sizes="auto, (max-width: 553px) 100vw, 553px" /></a>
Background 
The case before APERC arose from proposals submitted by Andhra Pradesh&#8217;s three power distribution (DISCOMs) seeking approval for solarization of agricultural feeders.
APSPDCL planned to solarize 167,452 pumps corresponding to 751 MW of solar capacity, including 141 MW in the Kuppam area. APCPDCL proposed 191.5 MW covering 76,602 pumps, while APEPDCL proposed 220.3 MW for 49,533 pumps.
In total, the DISCOMs proposed solarization of 293,587 pumps with 1,162.8 MW of solar capacity. Tariffs were determined through tariff-based competitive bidding at the circle level and subsequently reduced through negotiations with successful bidders, resulting in a weighted-average tariff of ₹3.17 (~$0.035)/kWh.
During the public consultation process, several stakeholders argued that Andhra Pradesh already had surplus power and long-term tie-ups with SECI for 7,000 MW of solar power at significantly lower tariffs, and that additional procurement would increase fixed-cost burdens from backed-down thermal plants.
They also argued that the projected savings from feeder-level solarization were illusory and merely reflected a reduction in government subsidy for agriculture rather than real cost savings for the power system. Allocating cheaper solar power exclusively to agriculture would increase the cost of supply for non-agricultural consumers.
Concerns were also raised about the relatively higher tariffs discovered under PM-KUSUM compared to large-scale solar parks and about the failure of DISCOMs to sufficiently renegotiate tariffs after MNRE relaxed the requirement of using ALMM List II solar cells for tenders floated before a certain cut-off date. Following the reduction of GST on renewable energy devices from 12% to 5%, the stakeholder contended that the benefit of this tax reduction must be passed on to consumers through lower tariffs.
In response, the DISCOMs maintained that feeder-level solar projects are fundamentally different from utility-scale solar parks. They pointed out that PM-KUSUM projects are decentralized, spread across multiple small land parcels, involve higher land acquisition and development costs, and lack economies of scale.
The DISCOMs also stated that mandatory domestic content requirements under Component C significantly increased costs and that Andhra Pradesh&#8217;s lower solar irradiation compared to states such as Gujarat and Rajasthan resulted in lower capacity utilization factors and higher tariffs.
They further argued that localized solar generation would reduce transmission losses, help meet distributed renewable energy obligations, and provide a dependable daytime power supply to farmers.
Commission&#8217;s Analysis 
APERC held that the tariffs determined through competitive bidding and post-bid negotiations were reasonable when viewed in the context of the project&#8217;s size, decentralized nature, domestic content requirements, and connection at the 11 kV level.
The Commission rejected direct comparisons with large solar park tariffs, observing that once interstate transmission losses and wheeling charges are accounted for, the effective landed cost of utility-scale solar at the distribution level would be significantly higher.
Referring to a suo motu order <a href="https://www.mercomindia.com/cerc-affirms-gst-rate-cut-on-renewable-energy-equipment-as-change-in-law" target="_blank" rel="noopener">issued</a> by the Central Electricity Regulatory Commission, APERC treated the GST reduction as a change in law event requiring benefits to be passed on to consumers. It was estimated that the reduction in effective GST would lower project capital costs by around ₹1.4 million (~$15,519)/MW, translating into a reduction of approximately ₹0.11 (~$0.0012)/kWh in the levelised tariff. On this basis, the Commission set the maximum permissible tariff for feeder-level solar projects at ₹3.09 (~$0.034)/kWh.
APERC acknowledged developers&#8217; claims that increases in module prices and balance-of-system costs had offset GST benefits, but held that regulatory certainty and consumer interest required a clear tariff ceiling. At the same time, it allowed limited relief for expenditure incurred before the GST cut-off date to avoid retrospective financial hardship.
Based on this analysis, the Commission concluded that the procurement of 1,162.8 MW under PM-KUSUM Component C was economically justified, aligned with the state&#8217;s long-term power requirements, and beneficial to consumers.
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APERC Approves 1.16 GW Solar Procurement with ₹3.09/kWh Tariff Cap

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					</table>The Arunachal Pradesh Electricity Regulatory Commission (<a href="https://apserc.nic.in/" target="_blank" rel="noopener">APSERC</a>) has issued the draft Deviation Settlement Mechanism and Related Matters Regulations, 2025, to establish a commercial mechanism to ensure grid users’ adherence to scheduled electricity drawal and injection and maintain grid security and stability.
The regulations apply to all sellers with installed capacity of 1 MW and above connected to the intrastate transmission system (InSTS), including renewable energy, except wind and solar open access generators and captive generators.
It also applies to all buyers, including distribution licensees, deemed distribution licensees, and full open access consumers connected to the intrastate transmission system.  Partial open access consumers (even on InSTS) and all open access consumers on the distribution network are settled under the Open Access Regulations.
Stakeholders can submit their feedback by December 31, 2025.
Computation of Deviation
A deviation in a time block for general sellers will be computed as follows:
Deviation-general Seller (DGS) (in MWh) = [(Actual injection in MWh) – (Scheduled generation in MWh)].
Deviation-general Seller (DGS) (in %) = 100 x [(Actual injection in MWh) – (Scheduled generation in MWh)] / [(Scheduled generation in MWh)].
A deviation in a time block for wind-solar (WS)  sellers will be computed as follows:
(a) For the period from the date of commencement of these regulations to March 31, 2026
Deviation-WS seller (DWS) (in MWh) = [(Actual Injection in MWh) – (Scheduled generation in MWh)];
Deviation-WS seller (DWS) (in %) = 100 x [(Actual Injection in MWh) – (Scheduled generation in MWh)] / [(Available Capacity)];
(b) For the period from April 1, 2026
Deviation-WS seller (DWS) (in MWh) = [(Actual Injection in MWh) – (Scheduled generation in MWh)];
Deviation-WS seller (DWS) (in %) = 100 x [(Actual Injection in MWh) – (Scheduled generation in MWh)] / [(X% of Available Capacity) + (100-X) % of Scheduled Generation):
The X’ will be determined by the Commission through separate orders after public consultation.
Deviation in a time block for buyers will be computed as follows:
Deviation – Buyer (DBUY) (in MWh) = [(Actual drawal in MWh) – (Scheduled drawal in MWh)]. Deviation – Buyer (DBUY) (in %) = 100 x [(Actual drawal in MWh) – (Total Scheduled drawal in MWh)] / [(Scheduled drawal in MWh)].
Normal Rate of Charges for Deviation
The normal rate (NR) of charges for deviation for a particular time block will be the highest of (A), (B), or (C), where (A), (B), and (C) are as follows:
(A) The weighted average ACP (in paise /kWh) of the integrated day-ahead market (DAM) segments of all the power exchanges.
(B) The weighted average ACP (in paise /kWh) of the real-time market segments of all the power exchanges.
(C) The sum of:
(a) 1/3 [weighted average ACP (in paise/kWh) of the integrated DAM segments of all the power exchanges]
(b) 1/3 [weighted average ACP (in paise/kWh) of the real-time market segments of all the power exchanges]
(c) 1/3 [ancillary service charge (in paise/kWh) computed based on the total quantum of Ancillary Services (SRAS UP and TRAS UP) deployed and the net charges payable to the ancillary service providers for all the regions]: provided that in case of non-availability of ACP for any time block on a given day, ACP for the corresponding time block of the last available day will be considered.
Charges for Deviation
Charges for deviation, in respect of a general seller (other than RoR generating station and a generating station based on municipal solid waste) will be as under:
<a href="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/12/1a.png"><img loading="lazy" decoding="async" class="aligncenter wp-image-87859 size-full" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/12/1a.png" alt="1a" width="627" height="478" srcset="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/12/1a.png 627w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/12/1a-300x229.png 300w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/12/1a-624x476.png 624w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/12/1a-600x457.png 600w" sizes="auto, (max-width: 627px) 100vw, 627px" /></a>
Deviation charges, in respect of a general seller being a RoR generating station, without any linkage to grid frequency, are as follows:
<a href="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/12/2A.png"><img loading="lazy" decoding="async" class="aligncenter wp-image-87860 size-full" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/12/2A.png" alt="2A" width="637" height="222" srcset="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/12/2A.png 637w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/12/2A-300x105.png 300w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/12/2A-624x217.png 624w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/12/2A-600x209.png 600w" sizes="auto, (max-width: 637px) 100vw, 637px" /></a>
Charges for deviation, in respect of a general seller being a generating station based on municipal solid waste and without any linkage to grid frequency, will be as under:<a href="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/12/3a-1.png"><img loading="lazy" decoding="async" class="aligncenter wp-image-87864 size-full" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/12/3a-1.png" alt="3a" width="607" height="162" srcset="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/12/3a-1.png 607w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/12/3a-1-300x80.png 300w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/12/3a-1-600x160.png 600w" sizes="auto, (max-width: 607px) 100vw, 607px" /></a>
Charges for deviation, in respect of a WS Seller, including such generating stations aggregated at a pooling station through a qualified coordinating agency (QCA), will be as follows:
<a href="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/12/4a.png"><img loading="lazy" decoding="async" class="aligncenter wp-image-87862 size-full" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/12/4a.png" alt="4a" width="633" height="167" srcset="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/12/4a.png 633w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/12/4a-300x79.png 300w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/12/4a-624x165.png 624w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/12/4a-600x158.png 600w" sizes="auto, (max-width: 633px) 100vw, 633px" /></a>
For standalone energy storage systems (ESS), deviation charges will be the same as those applicable to general sellers, excluding run-of-river generating stations and those based on municipal solid waste.
When the ESS is in charging mode, any overdrawal from the grid will be treated as under-injection, while underdrawal will be treated as over-injection, with deviation charges settled accordingly.
In the case of an ESS being a standalone pumped hydro storage project, the deviation charges and the formula for computation during the charging period will be aligned with those applicable to a WS seller being a generating station based on solar sources.
For WS generators with ESS connected at the same interconnection point, the deviation charges can be one of the following:
<ul>
<li>Deviation charges applicable to the WS generator category during periods when the solar, wind, or hybrid generating station is injecting power.</li>
</ul>
<ul>
<li>Deviation charges applicable will be equivalent to charges applicable to the ESS is injecting power</li>
<li>Deviation charges applicable to a standalone ESS for drawal by BESS based on the scheduled drawal from the grid.</li>
</ul>
Each generator and ESS must be equipped with a special energy meter to capture individual actual injection and drawal data accurately.
Charges for Deviation, in respect of a Buyer, will be receivable or payable as follows:
<a href="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/12/5a.png"><img loading="lazy" decoding="async" class="aligncenter wp-image-87858 size-full" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/12/5a.png" alt="5a" width="600" height="568" srcset="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/12/5a.png 600w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/12/5a-300x284.png 300w" sizes="auto, (max-width: 600px) 100vw, 600px" /></a>
Charges for the injection of infirm power will be zero, except in the cases specified under a general seller being a RoR generating station, and a general seller being a generating station based on municipal solid waste.
If infirm power continues to be scheduled after the successful completion of the trial run, deviation charges for any variation from the scheduled infirm power will be as applicable for a general seller.
When the system frequency exceeds 50.05 Hz, the charges for the injection of infirm power or for the deviation of scheduled infirm power after the trial run due to over-injection by a general seller will be zero.
Deviation charges for drawal of start-up power before the commercial operation date of a generating unit, or for drawal of power to run auxiliaries during the shutdown of a generating station, will be payable at the reference charge rate or the contract rate.
In the absence of either, the rate will be determined based on the weighted average area clearing price of the Day-Ahead Market segments across all power exchanges for the respective time block.
In the event of a forced or partial outage of a seller, deviation charges will be levied at the reference charge rate for up to eight time blocks, or until the seller’s schedule is revised, whichever occurs earlier.
Payment Schedule
Payment of deviation charges has high priority, and the concerned state entity must pay the indicated amount within ten days of the SLDC issuing the statement of charges for deviation into the state deviation pool account. The state entity must make payment irrespective of any mistake or error in the bill, and the SLDC will rectify any revision or modification on account of such mistake or error in subsequent bills of the entity concerned.
If payment is delayed beyond 10 days from the date of issue of the statement by the SLDC, the defaulting State Entity must pay simple interest at 0.04% for each day of delay.
All payments to entities entitled to receive any amount on account of deviation charges must be made within two working days of receipt of payments in the state deviation pool account. In case of delay in payment into the state deviation pool account and associated interest, if any, beyond twelve days from the date of issue of the statement of charges for deviations.
State entities receiving payment for deviation or interest will be paid from the balance available in the state deviation pool account, and if the balance is insufficient, payment will be made on a pro rata basis from the available balance.
The liability to pay interest for delay in payments into the state deviation pool account will continue until the interest is fully paid, irrespective of whether constituents entitled to receive payments have been paid from the state deviation pool account in part or in full.
All sellers and buyers who, at any time during the previous financial year, failed to make payment of charges for deviation within the specified time must open a letter of credit (LC) equal to 110% of their average payable weekly liability for deviations in the previous financial year, in favor of the SLDC, within a fortnight from the date these regulations come into force.
If a regional entity fails to pay the deviation charges into the Deviation and Ancillary Service Pool Account within ten days, the State Load Despatch Centre can encash the LC to cover the default amount. The regional entity must then replenish the LC within three days.
The Central Electricity Regulatory Commission <a href="https://www.mercomindia.com/cerc-deviation-settlement-guidelines/" target="_blank" rel="noopener">issued</a> its Deviation Settlement Mechanism and Related Matters Regulations in August last year.
Subscribe to Mercom’s real-time <a href="https://mercomindia.com/product/mercoms-renewable-energy-regulatory-updates/" target="_blank" rel="noopener">Regulatory Updates</a> to ensure you don’t miss any critical updates from the renewable industry.

Arunachal Electricity Regulator Issues Draft Deviation Settlement Guidelines

Andhra Pradesh’s decision to withdraw 21 wind power purchase agreements (PPAs) including that of Axis Wind Farms has been stalled by the <a href="http://aptel.gov.in/" target="_blank" rel="noopener noreferrer">Appellate Tribunal for Electricity</a> (APTEL).
Andhra Pradesh South Power Distribution Company Limited (APSPDCL) had submitted to the Andhra Pradesh Electricity Regulatory Commission (APERC) that 21 wind PPAs for wind power projects worth 776.9 MW should be canceled.
A portion of the petition said that given the state DISCOMs’ consequent inability to bear the additional financial burden involved in purchasing power from 21 wind developers, it has decided to withdraw the PPAs entered with various wind power projects, including the clients of Suzlon and Axis Energy Ventures. It argued that since the PPAs are not yet approved, it is not enforceable and the APSPDCL is at liberty to withdraw the PPAs. Stating this, the state DISCOMs requested to withdraw the 21 PPAs entered with various wind power projects. The commission is slated to hear the matter on August 17, 20119.
Meanwhile, Axis has requested APTEL to issue an ad-interim stay on further proceedings. The petitioner further stated that it has already invested huge amounts to proceed with the projects. The withdrawal would cause “irreparable injury and loss apart from great financial burden, since bank guarantees of substantial amounts have already been given to nodal agencies,” argued Axis.
APTEL has asked the respondents to send back the notice issued to them with necessary clarifications by August 26, 2019.
In July 2019, <a href="https://mercomindia.com/andhra-court-stay-order-solar-wind-tariffs/" target="_blank" rel="noopener noreferrer">Amaravathi High Court</a> had issued a stay order on the implementation of the state DISCOM’s letter seeking a revision in the power purchase agreement for the solar and wind projects. The stay will be in place until August 22, 2019. <a href="https://mercomindia.com/wind-curtailment-andhra-ppa-revision/" target="_blank" rel="noopener noreferrer">However, even after the stay order,</a> the state began severely curtailing wind power, which was confirmed to Mercom by wind developers with assets in the state.
Previously, <a href="https://mercomindia.com/andhra-court-stay-order-solar-wind-tariffs/" target="_blank" rel="noopener noreferrer">Mercom</a> reported that the nine renewable energy project developers approached the court in the matter: ReNew Power, Azure Power, ACME Solar, Axis Wind Farms, Khandke Wind Energy, Vena Energy Power, Ecoren Energy, Vayu Urja Bharat and Waneep Solar (special purpose vehicles of Hero Future Energies).
These developments come on the heels of the state’s new chief minister Jaganmohan Reddy’s newly-formed <a href="https://mercomindia.com/mnre-andhra-pradesh-committee-solar-wind-ppa/" target="_blank" rel="noopener noreferrer">committee</a> to deliberate and bring down the costs in all the high-priced PPAs for wind and solar power projects signed during the term of the previous government, alleging corruption.
&nbsp;

APTEL Stalls Andhra DISCOM’s Move to Cancel Axis Energy’s Wind PPA

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