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					</table>The Meghalaya State Electricity Regulatory Commission (<a href="https://mserc.gov.in/" target="_blank" rel="noopener">MSERC</a>) has issued draft rules laying down the terms and conditions for tariff determination for power generated from renewable energy sources. The rules will remain in force until March 31, 2028.
Stakeholders must send their objections/comments within 15 days.
The draft Meghalaya State Electricity Regulatory Commission (Terms and Conditions for Determination of Tariff for Generation from Renewable Energy Sources) Regulations 2025 applies to all grid-connected renewable energy projects whose power procurement tariffs must be determined by the Commission. It covers wind, solar, floating solar, solar thermal, renewable hybrid projects, and renewable energy with storage projects.
Wind projects must use new wind turbine generators at sites approved by the nodal agency or the government.
Floating solar installed with any existing renewable energy project other than ground-mounted solar will be treated as a hybrid renewable energy project.
Hybrid projects must have at least 33% of installed capacity from one of the constituent renewable energy sources at a common interconnection and metering point.
Renewable energy with storage projects must use a part or all of the project’s renewable generation to charge a storage system, and both must be connected at the same interconnection point.
Project-specific tariffs will be determined on a case-by-case basis for solar, floating solar, solar thermal, onshore and offshore wind, renewable energy hybrid, and renewable energy with storage.
Project-specific tariffs may also apply to any new renewable energy technologies approved by the central government. All financial and operational norms, other than capital cost, will serve as ceiling norms.
If the energy generated by a renewable energy project exceeds the normative capacity utilization factor (CUF) or plant load factor (PLF), it may be sold in the power market through bilateral or collective transactions. The buyer of the excess energy must pay the tariff applicable for the year.
Tariff Structure
Tariffs for renewable energy will comprise return on equity, interest on loan, depreciation, interest on working capital, and operation and maintenance (O&amp;M) expenses.
The generic tariffs will be determined on a levelized basis, taking into account the project&#8217;s year of commissioning.
The levelized tariff will be computed by accounting for the discount factor equal to the post-tax weighted average cost of capital.
Capital Cost
The norms of capital cost include land costs, pre-development expenses, the cost of plant and machinery, civil works, erection and commissioning, financing costs, interest during construction, and development of evacuation up to the interconnection point.
Debt Equity Ratio
The debt–equity ratio for the generic and project-specific tariff will be 70:30.
Interest and Finance Charges 
The generic and project-specific tariffs will be calculated assuming a loan tenure of 15 years.
The interest on loan will be computed at the normative rate of 200 basis points above the average of the State Bank of India’s one-year marginal cost of funds-based lending rate during the last six months.
The loan repayment will begin in the first year of commercial operation and will be equal to the annual depreciation allowed.
Depreciation
Depreciation will be calculated on the following basis:
The value base for depreciation will be the project&#8217;s capital cost.
Depreciation will be allowed up to 90% of the project&#8217;s capital cost, with a salvage value of 10%. No depreciation will be allowed on the grant or capital subsidy received for the project.
A depreciation rate of 4.67% per annum will be applied for the first 15 years, and the remaining depreciation will be spread evenly over the remaining useful life.
Return on Equity
The normative return on equity is set at 14% for all renewable energy technologies, except small hydro projects.
The return on equity will be grossed up by the applicable minimum alternate tax rate for the first 20 years and by the corporate tax rate thereafter.
Interest on Working Capital
Working capital will include one month’s O&amp;M and receivables equivalent to 45 days of tariff for the sale of electricity, calculated on the normative CUF or PLF. The working capital will also comprise 15% of O&amp;M expenses.
In the case of renewable hybrid projects, the working capital will be the sum of the working capital requirements for renewable energy sources, proportionate to their rated capacity in the project.
Interest on working capital will be the interest rate equal to the normative interest rate of 325 basis points above the average one-year State Bank of India’s Marginal Cost of Funds based Lending Rate for a one-year tenor in the last six months.
CUF and PLF
The CUF and PLF will be calculated by assuming 8,766 hours per year,
O&amp;M Expenses
The O&amp;M expenses will be determined based on normative O&amp;M expenses in the first year of the control period.
The normative O&amp;M allowed in the first year of the control period will be escalated at 5.25% annually.
Rebate on Bills
A rebate of up to 1.5% on the bill amount can be availed for timely payment.
In case of payment delays exceeding 45 days, a late payment surcharge will apply.
The Commission will factor in grants, subsidies, and incentives, including accelerated depreciation, when determining tariffs.
Developers will also be allowed to recover statutory levies such as electricity duty on auxiliary consumption, within the normative limit.
CUF for Wind Projects
For wind power projects, the CUF will range from 22% for projects with an annual mean wind power density up to 220 watts/m² to 35% for projects with an annual mean wind power density above 440 watts/m².
The annual mean wind power density will be calculated at a height of 100 m.
CUF for Solar Projects
Solar projects must maintain a minimum CUF of 21%, and the CUF for floating solar projects will be 19%.
The Commission will approve auxiliary consumption for project-specific tariffs if the maximum auxiliary consumption for solar and floating solar projects is up to 0.75%
CUF for Hybrid Projects
Renewable hybrid projects must achieve a minimum CUF of 30% at the interconnection point. They will be offered a composite levelized tariff for the combined useful life of the renewable energy projects.
Storage Efficiency
For renewable energy with storage projects, the Commission will approve the storage efficiency only on a project-specific basis, with a minimum of 85% for solid-state battery systems.
The tariff for renewable energy with storage projects will be a composite tariff or a differential tariff based on the time of day, determined for energy supplied from the project and the storage facility.
The tariff will be determined for the supply of power on a round-the-clock basis or for time periods agreed by the project developer or the project beneficiary.
In August 2025, MSERC <a href="https://www.mercomindia.com/meghalaya-notifies-new-dsm-regulations-2025-to-enforce-grid-discipline" target="_blank" rel="noopener">notified</a> the “Intra-State Deviation Settlement Mechanism \and Related Matters Regulations, 2025” applicable across the entire state.
Subscribe to Mercom’s real-time <a href="https://mercomindia.com/product/mercoms-renewable-energy-regulatory-updates/" target="_blank" rel="noopener">Regulatory Updates</a> to ensure you don’t miss any critical updates from the renewable industry.

The Central Electricity Regulatory Commission (<a href="http://www.cercind.gov.in/" target="_blank" rel="noopener noreferrer">CERC</a>) has invited Terms of Reference (ToR) to engage consultants who will help them frame the regulations for renewable energy (RE) tariff determination starting April 1, 2020.
The last date for the submission of the ToR is November 29, 2019.
“Considering the developments in the sector during the current control period, the current and perceived challenges in the renewable energy sector and need for market development, the commission is of the view that it is necessary to have a fresh look into the basis and assumptions of tariff determination from renewable energy sources for the next control period beginning from April 1, 2020,” states the CERC.
The scope of the assignment includes:
Conduct relevant studies to help CERC in framing regulations for the control period starting from April 1, 2020, to March 31, 2023, and the tariff order for the first year of the control period.
Review the terms of the existing RE tariff regulations of 2017-20.
Analyze and study various alternatives and approaches for determining the tariff principles (financial, technical, and operational). Collect relevant information on capital cost, interest on loans and working capital, return on equity, depreciation, sourcing, and cost of fuel, land requirements and its cost, cost of equipment, operation and maintenance expenses, projects involving floating solar projects, hybrid projects (renewable-storage, renewable-renewable or renewable-conventional).
Compare competitive bids and tariff discovered for renewable energy projects at central and state level, auxiliary consumption, fuel calorific value, and other fuel-related specifications for renewable projects.
Develop other regulatory options or alternatives well supported by relevant and reliable analysis and documents.
Assist in drafting terms and conditions for tariff determination along with explanatory notes.
Analyze the comments and suggestions received on the draft regulations and prepare tariff models for each renewable technology and scenarios based on the regulations.
The scope of the assignment also includes a review of the existing operational and performance parameters and financial norms, including methodology and approach for renewable energy technologies taking into account various inputs.
According to the CERC, successful applicants are expected to review the existing tariff structure for renewable generating stations considering the current market scenario, including renewable energy penetration and emerging technologies like floating solar projects, hybrid renewable energy projects, renewable-conventional hybrid projects, renewable-storage projects.
Successful applicants need to complete the entire assignment within six months.
Meanwhile, the preparation of the final tariff models for each renewable technology and scenarios, and preparation of the draft tariff order for the first year (FY2020-21) should be completed within ten days.
Regarding the qualification criteria, the applicant should have professional qualifications with a background in finance, engineering, economics, and law, along with relevant experience in tariff determination.
The turnover and net worth of the consultant should be a minimum of ₹5 million (~$70,613).
The central electricity regulator also recently issued a draft regulation for sharing inter-state transmission charges and losses. According to the <a href="http://www.cercind.gov.in/2019/draft_reg/DR31-10-2019.pdf" target="_blank" rel="noopener noreferrer">draft</a>, the transmission charges will be shared among the designated ISTS customers so that the yearly transmission charges are fully covered and any adjustment on account of the revision of transmission charges are recovered.
In March 2019, the CERC <a href="https://mercomindia.com/cerc-generic-tariff-renewable-2019-20/" target="_blank" rel="noopener noreferrer">set</a> generic tariffs for the purchase of electricity from a host of renewable energy generation sources during the financial year 2019-20.
Image credit: LONGi Solar

CERC Seeks Consultants to Develop Tariff Regulations for Renewable Sources

The Maharashtra Electricity Regulatory Commission (<a href="http://www.mercindia.org.in/" target="_blank" rel="noopener noreferrer">MERC</a>) has issued the draft version for its tariff determination regulation order for renewable projects that are commissioned in the state for the generation and sale of electricity to distribution licensees in Maharashtra.
The regulations cover all renewable energy projects commissioned in Maharashtra for the generation and sale of electricity to the distribution companies. The power projects that are covered under the rule include solar, wind, biomass, hybrid renewable energy power projects, and non-fossil fuel-based co-generation.
According to the regulations, the project-specific tariff for the generation of electricity from these renewable sources should follow the ceiling norms.
In the draft, MERC has specified 25 years as the useful life of wind power projects, while 20 years has been set as the useful life of biomass power projects and non-fossil fuel-based co-generation projects, 35 years for small hydro projects, and 25 years for solar projects.
The commission has set the minimum capacity utilization factor (CUF) for small hydropower projects at 30% for the purpose of tariff determination. For wind and rooftop solar energy projects, the MERC has set CUFs at 22% and 19%, respectively. For solar thermal projects, CUF has been set to 23%. The plant load factor (PLF) for biomass projects has been established at 60% to 80%, depending on the year after commissioning.
For tariff determination, the normative capital cost of a rooftop solar project will be considered as ₹40 million (~$565,200)/MW for the base year. The commission has established operation and maintenance costs for wind energy projects at ₹772,000 (~$10,000)/MW, ₹1.5 million ($21,000)/MW for solar thermal projects, and ₹600,000 ($8,478)/MW for rooftop solar projects.
Earlier this year, the state <a href="https://mercomindia.com/generic-tariff-of-%e2%82%b93-29-kwh-solar-maharashtra/" target="_blank" rel="noopener noreferrer">set</a> the generic tariff for solar projects at ₹3.29 (~$0.047)/kWh for FY 2019-20. Moreover, the commission fixed ₹3.79 (~$0.054)/kWh as the generic tariff for rooftop solar projects. This tariff will not apply to rooftop solar projects covered under the MERC regulations for net metering.
Maharashtra was the third state after <a href="https://mercomindia.com/bihars-generic-tariff-solar-4-17-kwh/" target="_blank" rel="noopener noreferrer">Bihar</a> and <a href="https://mercomindia.com/generic-tariff-solar-tamil-nadu-3-04-kwh/" target="_blank" rel="noopener noreferrer">Tamil Nadu</a> to issue ‘Renewable Energy Tariff Order’ in April 2019.
In <a href="https://mercomindia.com/cerc-generic-tariff-renewable-2019-20/" target="_blank" rel="noopener noreferrer">March 2019</a>, the Central Electricity Regulatory Commission (<a href="http://cercind.gov.in/" target="_blank" rel="noopener noreferrer">CERC</a>) had <a href="https://mercomindia.com/cerc-generic-tariff-renewable-2019-20/" target="_blank" rel="noopener noreferrer">announced</a> the generic tariffs for the purchase of electricity from a host of renewable energy generation sources for FY 2019-20.
Image credit: Grandridge wind solar

Maharashtra Releases Draft Regulation for Tariff Determination of Renewable Projects

The Karnataka Electricity Regulatory Commission (<a href="https://www.karnataka.gov.in/kerc/Pages/home.aspx">KERC</a>) has proposed ₹2.95 (~$0.042)/kWh as the generic tariff for wind projects in the state.
Once the proposal is finalized, it will become the ceiling tariff for wind tenders in Karnataka for the financial year (FY) 2019-20.
This tariff will also apply in cases where payment towards banked energy are concerned. The generic tariff, if finalized, will be in force with effect from April 1, 2019, up to March 31, 2020. The KERC has invited suggestions and comments from stakeholders before finalizing the generic tariff. Comments and suggestions can be sent up to December 31, 2018.
The KERC has proposed a debt-equity ratio of 70:30 for tariff determination. Proposed project costs are ₹52.5 million (~$0.75 million)/MW at a CUF of 29 percent. The KERC has proposed interest rates of 11 percent on working capital and an interest rate of 10 percent on term loan.
The KERC has also proposed a loan tenure of 15 years. The project depreciation rate will be set at 4.67 percent of the capital cost for the first 15 years for recovery of debt, with remaining depreciation spread during the balance of the useful life of a project. The KERC has proposed a 14 percent return on equity (RoE) for wind projects.
While proposing the new generic tariff for wind, the KERC has taken into account the reduced operation and maintenance cost. The proposed generic tariff for wind is ₹0.50 (~$0.00716)/kWh less than the current generic tariff of ₹3.45 (~$0.04938)/kWh for wind for FY 2018-19. The proposed benchmark tariff is ₹0.09 (~$0.00129)/kWh more than the proposed generic tariff for wind in <a href="https://mercomindia.com/benchmark-tariff-solar-wind-tamil-nadu/">Tamil Nadu of ₹2.86 (~$0.04093)/kWh</a>.
<a href="https://mercomindia.com/kerc-sets-%E2%82%B93-74kwh-benchmark-tariff-wind-projects-karnataka/">In 2017</a>, the KERC had fixed ₹3.74 (~$0.05353)/kWh as the generic tariff for wind projects in Karnataka.

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