Karnataka Sets New Generic Tariff at ₹4.15/kWh for 1-10 kW Rooftop Solar Projects

Tariff applicable to projects for which the PPAs have been approved after December 19, 2018


The Karnataka Electricity Regulatory Commission (KERC) has set the generic tariff for grid-connected solar rooftop units between 1 kW and 10 kW installed by domestic consumers in the state. While the generic tariff without capital subsidy has been fixed at ₹4.15 (~$0.06)/kWh, the tariff with capital subsidy will be ₹3.08 (~0.044)/kWh.

The new tariff will be applicable to all new solar rooftop photovoltaic units between 1 kW and 10 kW capacity for which PPAs are approved by the commission after December 19,2018.

Earlier, the commission had determined a levelized tariff of ₹3.56 (~$0.51)/kWh for all solar rooftop photovoltaic projects in its May 5, 2018 order.

The commission mentioned that in determining the tariff for order dated May 5,2018, it had considered the operational and financial parameters for kW scale projects.

Therefore, for the new order, it again went back to revise the operational and financial parameters for kW scale rooftop projects.

Further, the commission did not find any merit in the revision of capacity utilisation factor (CUF) from 19 percent set earlier and decided to retain it, against the suggestion of CUF of 16 percent.

Similarly, for operation and maintenance (O&M) cost, the commission felt that there are no justifiable grounds for revision and decided to keep it at ₹600 (~$8.58)/kW for solar rooftop projects with an annual escalation of 5.72 percent.

However, the commission revised the capital cost from the earlier ₹40,000 (~$572.04)/kW to ₹48,000 (~$686.45)/kW for rooftop projects of 1 kW to 10 kW capacity. It stated –

“The commission also notes that the capital cost of smaller capacity SRTPV projects installed by domestic consumers would be higher than that adopted in the said order, as while the cost to be incurred on solar panels/modules could be lower because of lower capacity, the cost of other equipment and infrastructure would not be proportionally lower. It would also be difficult to differentiate between the capital cost of SRTPV plants of capacity up to 5 kW and up to 10 kW.”

The government of Karnataka under its Solar Policy 2014-21 has set a target of 2,400 MW for grid connected rooftop generation projects to be achieved by March 2021.

According to Mercom India Solar Project Tracker, Karnataka has installed large-scale solar capacity of over 5.3 GW and has a development pipeline of ~2.5 GW, making it the leading solar state.

Recently, the KERC rejected a petition to extend the project commission date and set a tariff of ₹4.36 (~$0.061)/kWh for a 1 MW grid-connected solar project developed on a farmer-owned land in the state’s Kalaburagi district.

Nitin is a staff reporter at Mercomindia.com and writes on renewable energy and related sectors. Prior to Mercom, Nitin has worked for CNN IBN, India News, Agricultural Spectrum and Bureaucracy Today. He received his bachelor’s degree in Journalism & Communication from Manipal Institute of Communication at Manipal University and Master’s degree in International Relations from Jindal School of International Affairs. More articles from Nitin Kabeer