The Uttar Pradesh Renewable Energy Commission (UPERC) has adopted a renegotiated tariff of ₹7.02 (~$0.11)/kWh as the new tariff for solar projects tendered in financial year 2015-16. This is negatively affecting 215 MW of grid-connected solar projects and hampering the growth of solar in the state.

UPERC was overseeing the tariff renegotiation in the state of Uttar Pradesh. Replying to a petition by Uttar Pradesh Power Corporation Limited (UPPCL) and Uttar Pradesh New and Renewable Energy Development Agency (UPNEDA), UPERC stated, “The Commission adopts a tariff of ₹7.02 (~$0.11)/kWh for the developers whose projects are complete.”

The tariff of ₹7.02 (~$0.11)/kWh will be applicable for a period of 12 years after which the developer will supply power to UPPCL at the average pooled power cost (APPC), which cannot be more than ₹7.02 (~$0.11)/kWh, stated an official at UPERC.

In all, 215 MW of grid-connected solar projects will be affected by this renegotiation. Out of the 215 MW, grid-connected solar projects totaling 135 MW have been commissioned.

Out of the nine companies that have commissioned projects, six are not ready to sell power at the renegotiated tariff. The UPERC order has paved the way to sign PPAs for 60MW of grid-connected solar projects out of a total auctioned capacity of 215 MW.

Six other developers that have yet to commission their projects are in danger of losing out on a PPA. The UPPCL has asked the UPERC if it wants to terminate the PPAs for these projects due to delays in project commissioning. The UPERC is yet to decide the fate of these projects, which total 80 MW.

According to Mercom’s India Solar Project Tracker, the current installed capacity of grid-connected solar in Uttar Pradesh is over 600 MW. The capacity addition has been very slow and if conditions like these persist, the state will have to outsource its solar power needs. But even that would be troublesome as few developers would be interested in selling power to a state with a history of reneging on contracts.

The Solar Energy Corporation of India (SECI) had tendered a total of 750 MW of solar at the Bhadla Solar Park in Rajasthan to supply power to Uttar Pradesh to fulfill demand.

Mercom reported in August 2017 that the National Solar Energy Federation of India (NSEFI) sought an extension of the project commissioning timeline for six solar projects in Uttar Pradesh.