Karnataka: Delayed Rooftop Solar Project’s Tariff Reduced to ₹5.20/kWh from ₹9.56/kWh

Emmvee Solar was the petitioner in the case against BESCOM


The Karnataka Electricity Regulatory Commission (KERC) issued an order in favor of the Bangalore Electricity Company (BESCOM) and directed Emmvee Solar to downward revise the tariff for a 1 MW rooftop solar power project.

Emmvee Solar Systems Private Limited stated in its petition that it was entitled to a tariff of ₹9.56 (~$0.13)/kWh as the project was commissioned within the timeline of one year as stipulated in the power purchase agreement.

While the state distribution company BESCOM said that Emmvee was only entitled to a tariff of ₹5.20 (~$0.07)/kWh as there was a delay in the completion of the project. It referred to an order passed by the Commission in 2016, which stated solar rooftop projects are to be completed in six months and that the project failed to do so. It noted that the Commission inadvertently allowed for a one-year completion period to the petitioner. Since the project was ready, the petitioner went ahead and commissioned it under protest at a tariff of ₹5.20 (~$0.07)/kW since it had already made a huge investment in it.

The Commission admitted that it had inadvertently authorized projects with a one-year commissioning date instead of six months before, but it had issued show-cause notices to several generators asking them to explain why commissioning timeline should not be revised to six months instead of one year.

Based on the responses, the Commission issued an order stating that the time allowed for commissioning would be six months. The KERC added that the petitioner had not submitted a response to its show-cause notice. It said that despite knowing about the six-month clause, the petitioner did not bring it to the notice of the Commission and was trying to take advantage of the inadvertent mistake.

The Commission reiterated that according to its regulations if a solar rooftop project is commissioned after 180 days, they are only entitled to a tariff of ₹5.20 (~$0.07)/kWh. It further stated that even though Emmvee did not request the Commission to fix a project-specific tariff, it has identified that the tariff would still work out to ₹5.20 (~$0.07)/kWh and that Emmvee would not suffer any loss because of this.

It also stated that the Commission is not to be blamed for its mistake as it had taken the necessary steps to rectify it. The Commission also added that the petitioner is not entitled to contest this because it had not done its due diligence in adhering to the guidelines issued by the KERC.

Considering these reasons, the state body found that the tariff of ₹5.20 (~$0.07)/kWh would be applicable for the rooftop solar project because it was only commissioned after the end of the stipulated time of six months.

Karnataka’s rooftop solar segment recently made headlines when Karnataka Renewable Energy Systems Manufacturers Association (KRESMA) began its protest against the state’s new rooftop solar order.

The association organized a press conference on December 13, 2019, where they laid out their grievances following the KERC order. Following this, they met with the chairman of the commission to communicate their issues with the order passed.

Earlier on December 9, 2019, the state issued an order as an attempt to accelerate capacity additions in the rooftop solar segment. But the order hasn’t gone down well with the rooftop solar installers.

The commission issued the order that proposes various business models to propel the rooftop solar installations.

Nithin Thomas is a staff reporter at Mercom India. Previously with Reuters News, he has covered oil, metals and agricultural commodity markets across global markets. He has also covered refinery and pipeline explosions, oil and gas leaks, Atlantic region hurricane developments, and other natural disasters. Nithin holds a Masters Degree in Applied Economics from Christ University, Bangalore and a Bachelor’s Degree in Commerce from Loyola College, Chennai. More articles from Nithin.