KERC Sets a New Solar Tariff at 4.36 Rupees for Each MW

KERC (Karnataka Electricity Regulatory Commission) has devised a new price for the solar tariff. For the solar photo voltaic large scale power plants that are connected to the new solar grids, the tariff has been finalized at a pricing of 4.36 rupees for each unit of energy that will be produced. This is the pricing will be available and received by all the developers of the solar plant facilities who are going to sell the energy that they will be producing and harnessing the grid and the utilities responsible for the distribution of this energy.

This new solar tariff will become applicable to all the solar-powered projects that will be signing the deal or the PPAs (power purchase agreements)
with all the utilities responsible for the distribution in the energy sector of India for the financial year of 2017 – 2018.

In addition to this, this new solar tariff will be applicable to all the solar photo voltaic plants as well as the large scale solar-powered projects that have the capacities in Megawatts and will be connected to the solar grid and also have their respective power purchase agreements already drafted and signed prior to this. These projects and plants, however, are likely to go on-stream during this financial year 2017 – 2018.

The new regulation has made a permissible allowance for the cost of capital to be about 4.40 rupees for each Megawatt of solar energy that is produced as well as an ROE (Return of Equity) at a rate of about 16 percent for all the developers that are relentlessly working in this field of renewable energy.

The solar developers, if given an opportunity, are capable of raising a debt up to a rate of 70 percent of the total cost of the project and the regulator will permit a repayment of the debt in a span of the upcoming 12 years.
These new tariffs along with the new technologies and developments are making the renewable sector of India reach greater heights and accomplish great achievements. People are now becoming more aware of the merits of using non-conventional sources of energy like solar energy, wind energy and biomass energy instead of the conventional sources of energy like coal, petroleum and natural gas.

Not only are the alternative sources of energy helpful for the preservation of the ecological balance in the environment, it is cheap, affordable and immensely useful in decreasing the expenditure incurred upon power consumption. If things keep progressing at such a pace then India surely will emerge as a leading nation in the renewable energy sector.