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<p>The Rajasthan Electricity Regulatory Commission (RERC) has fixed ₹3.93 (~$0.06)/kWh as the generic tariff for solar PV projects without accelerated depreciation (AD) in Rajasthan. The tariff is levelized for 25 years. The AD component of the tariff has been fixed at ₹0.27 (~$0.004)/kWh. The new benchmark tariff with AD is ₹3.66 (~$0.056)/kWh.</p>
<p>This tariff will apply to all solar PV projects with signed power purchase agreements (PPA) on or before March 31, 2018, and commissioned on or before March 31, 2019.</p>
<p><a href="https://mercomindia.com/wp-content/uploads/2017/10/RERC-Solar-Tariff-Order-for-FY-2017-18.png"><img decoding="async" loading="lazy" class="aligncenter size-full wp-image-7909" src="https://mercomindia.com/wp-content/uploads/2017/10/RERC-Solar-Tariff-Order-for-FY-2017-18.png" alt="RERC Solar Tariff Order for FY 2017-18" width="342" height="199" srcset="https://cms.mercomindia.com/wp-content/uploads/2017/10/RERC-Solar-Tariff-Order-for-FY-2017-18.png 342w, https://cms.mercomindia.com/wp-content/uploads/2017/10/RERC-Solar-Tariff-Order-for-FY-2017-18-300x175.png 300w" sizes="(max-width: 342px) 100vw, 342px" /></a></p>
<p>The RERC also stated in its tariff order that for rooftop solar PV systems covered under RERC Net Metering Regulations 2015, net excess energy (more than 50 units) exported to the grid by the consumer would be payable at the tariff rate of ₹3.93 (~$0.06)/kWh until the next tariff order is issued by the commission.</p>
<p>This tariff would be payable to all rooftop solar systems developed under the net metering policy during financial year (FY) 2017-18 and earlier, and would be irrespective of any capital grant subsidies or AD benefits.</p>
<p>The RERC has stated that for utility-scale solar projects with capacity more than 5 MW, the generic tariff will act as the upper tariff ceiling for participants of state tenders.</p>
<p>The new benchmark tariff of ₹3.93 (~$0.06)/kWh without AD is 27 percent less than the benchmark tariff of ₹5.40 (~$0.083)/kWh without AD set by RERC in FY 2016-17. In FY 2016-17, the benchmark tariff with AD was ₹4.85 (~$0.074)/kWh, 25 percent more than the new benchmark tariff with AD of ₹3.66 (~$0.056)/kWh.</p>
<p><strong>Module and project cost not based on reality:</strong> When calculating the project cost of a solar generation project, the RERC has considered operation and maintenance (O&amp;M) expenses, depreciation, interest on long-term loans, interest on working capital, and return on equity as fixed cost components. The RERC has fixed ₹35.84 million (~$0.55 million)/MW as the benchmark capital cost for solar PV projects in Rajasthan for FY 2017-18. This fixed cost takes into consideration module costs of just $0.25 (~₹16.4)/W. With current module prices in the $0.35-$0.38/W range, these cost considerations are simply not realistic.</p>
<p>“The benchmark tariff setting exercise is not based on reality. For the same time period, Rajasthan has taken a module price consideration of ₹0.25/W while Karnataka has considered its module costs based on ₹0.35/W. They just want to get to a number that is comfortable to them,” said Raj Prabhu, CEO of Mercom Capital Group.</p>
<p><a href="https://mercomindia.com/wp-content/uploads/2017/10/Break-Up-for-Capital-Cost-for-Solar-Projects-for-FY-2017-18.png"><img decoding="async" loading="lazy" class="aligncenter size-full wp-image-7910" src="https://mercomindia.com/wp-content/uploads/2017/10/Break-Up-for-Capital-Cost-for-Solar-Projects-for-FY-2017-18.png" alt="Break-Up for Capital Cost for Solar Projects for FY 2017-18" width="603" height="320" srcset="https://cms.mercomindia.com/wp-content/uploads/2017/10/Break-Up-for-Capital-Cost-for-Solar-Projects-for-FY-2017-18.png 603w, https://cms.mercomindia.com/wp-content/uploads/2017/10/Break-Up-for-Capital-Cost-for-Solar-Projects-for-FY-2017-18-600x318.png 600w, https://cms.mercomindia.com/wp-content/uploads/2017/10/Break-Up-for-Capital-Cost-for-Solar-Projects-for-FY-2017-18-300x159.png 300w" sizes="(max-width: 603px) 100vw, 603px" /></a></p>
<p><strong>Deemed Generation/Must Run Provision: </strong>The commission rejected deemed generation for solar and considers it appropriate that the “must run” status must continue and should not be subject to the merit order dispatch principle. However, must run status will not apply in the case of a system operational constraint, which creates an easy way to circumvent the must run status.</p>
<p>There was no consideration given to additional costs associated with GST while calculating capital costs.</p>
<p>Mercom reported in April 2017 that both <a href="https://mercomindia.com/tnerc-sets-new-benchmark-tariff-rs-4-50-0-069kwh-solar-pv-projects-tamil-nadu/" target="_blank" rel="noopener">Tamil Nadu</a> (₹4.50/kWh) and <a href="https://mercomindia.com/kerc-sets-new-benchmark-tariff-rs-4-36-0-064kwh-grid-connected-large-scale-solar-projects-fy2017-18/" target="_blank" rel="noopener">Karnataka</a> (₹4.36/kWh) have set the solar benchmark tariff for FY 2017-18.</p>
<p>According to Mercom’s <em><a href="https://mercomindia.com/product/india-solar-project-tracker/" target="_blank" rel="noopener">India Solar Project Tracker</a></em>, Rajasthan has ~2.1 GW of installed large-scale solar capacity as of September 2017, and almost 1.2 GW under development.</p>
<p>Image credit: Flickr</p>
<div class="saboxplugin-wrap" itemtype="http://schema.org/Person" itemscope itemprop="author"><div class="saboxplugin-tab"><div class="saboxplugin-gravatar"></div><div class="saboxplugin-authorname"><a href="https://cms.mercomindia.com/author/priya-sanjay/" class="vcard author" rel="author"><span class="fn">Priya Sanjay</span></a></div><div class="saboxplugin-desc"><div itemprop="description"><div class="designboxt">
<p><img class="alignleft" style="border-radius: 50%;height: 50px;margin-top: -4px;border: 1px solid #00b451" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2022/04/Priya-Sanjay-Managing-Director-Mercom-India-1.jpg" width="50" /></p>
<p><strong style="text-decoration: underline">Priya Sanjay,</strong> Staff reporter at Mercom India<br />
<a href="https://mercomindia.com/author/priya-sanjay/" target="_blank" rel="noopener">More articles from Priya Sanjay.</a></p>
</div>
<div class="authorboxn">
<p><img class="alignleft" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2022/04/Priya-Sanjay-Managing-Director-Mercom-India-1.jpg" alt="Wendy Prabhu" />Priya currently serves as the Publisher for MercomIndia.com. With more than a decade of experience working in corporate communications, research, and policy, Priya has deep roots in the Indian energy markets and is regularly in touch with policy makers and industry leaders. Priya received her bachelor’s degree from Vidya Vardhaka College of Arts in Bangalore, India for Political Science and Economics and completed her MBA from Bangalore University. <a href="https://mercomindia.com/author/priya-sanjay/">More articles from Priya Sanjay.</a></div>
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RERC Sets Benchmark Tariff of ₹3.93/kWh for Solar PV Projects in Rajasthan for FY 2017-18

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