The Tamil Nadu Electricity Regulatory Commission (TNERC) has proposed a new benchmark solar tariff of Rs.4.50 ($0.0673)/kWh with accelerated depreciation and a tariff of Rs.4.41 (~$0.0659)/kWh without accelerated depreciation for FY 2017-18. The commission has invited comments and suggestions on its proposal on or before March 15, 2017. Once comments and suggestions are received and reviewed, the new tariff order will be come into force from April 1, 2017.

The new tariff order includes a single-part tariff which consists of fixed cost and variable energy cost for solar energy generation.

The suggested capacity utilization factor (CUF) is 19 percent and the project costs for solar PV projects have been fixed at Rs.0.47 million (~$703,014)/MW. The commission has also proposed decreasing the rate of interest on working capital from the previous 13.5 percent to 11.5 percent.

The new proposed tariff is 12% lower than the previous tariff of Rs.5.10 (~$0.07628)/kWh (with accelerated depreciation) and Rs.4.56 (~$0.06821)/kWh without. TANGEDCO had already made this adjustment in tariff last October when it floated a tender for 500 MW of solar. Response to that tender was muted as the tariff was considered too low for a high risk off-taker like TANDECO. However, Chinese module prices have declined by approximately 30% over the last year.

Image Credit: TNERC