KERC Sets New Benchmark Tariff of Rs.4.36 (~$0.064)/kWh for Grid Connected Large-Scale Solar Projects for FY2017-18

The Karnataka Electricity Regulatory Commission (KERC) has set Rs.4.36 (~$0.064)/kWh as the benchmark tariff for grid-connected large-scale solar projects for financial year (FY) 2017-18. The new benchmark tariff will be applicable to all new grid-connected MW-scale solar PV projects entering into power purchase agreements (PPA) on or after April 1, 2017, and before April 1, 2018.

The new benchmark tariff is Rs.2.15 (~$0.033) less than the benchmark tariff of FY2016-17. The KERC has taken into consideration the declining module prices while determining the new benchmark tariff.

The KERC had proposed a new benchmark tariff in March of Rs.4.51 (~$0.066)/kWh for solar PV projects. The final benchmark tariff set is about 3 percent lower.

The KERC has regulated, the tariff determined will also be applicable to those grid connected megawatt-scale solar PV projects for which PPAs were entered into before April 1,2017, but, are not commissioned within the specified commercial operation date (COD) and achieve COD during the period from April 1, 2017, to March 31, 2018. The approved tariff in respect of solar thermal projects will continue per the commission’s order dated July 30, 2015 and solar rooftop PV projects will remain the same per the commission’s order dated May 2, 2016, until March 31, 2018.

In the new tariff order, the KERC has also specified a debt repayment period of 12 years for project developers.

According to Mercom’s India Solar Project Tracker, Karnataka has 1.1 GW of installed solar capacity as of March 31, 2017, and almost 2.9 GW of development pipeline.

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