Tamil Nadu Sets New Solar Generic Tariff at ₹3.11/kWh

Recently, the state also announced benchmark tariff for solar and wind projects developed in the state


The Tamil Nadu Electricity Regulatory Commission (TNERC) has issued levelized generic tariff for the procurement of solar power in the state for the financial year (FY) 2018-19.

TNERC has fixed ₹3.11 (~$0.0478)/kWh without accelerated depreciation (AD) as the levelized tariff for solar.

The AD component of the tariff is ₹0.06 (~$0.00092)/kWh. According to TNERC, the levelized tariff with AD is ₹3.05 (~$0.0468)/kWh. The proposed tariff with AD is ₹1.36 (~$0.0209)/kWh lower than the previous generic tariff of ₹4.41 (~$0.0677)/kWh with AD.

In 2017, TNERC had set ₹4.50 (~$0.066)/kWh as the benchmark tariff for solar PV projects and ₹10.19 (~$0.157)/kWh for solar thermal projects without AD.

TNERC Generic Solar Tariff Order for FY2018-19

TNERC has fixed 25 years as the useful life of a solar project. TNERC has also fixed ₹35 million (~$537,857)/MW as the project cost and capacity utilization factor (CUF) at 19 percent for the calculation of levelized tariff.

For this tariff order, the TNERC fixed operation and maintenance (O&M) expense of 1.4 percent of capital cost of solar projects with an escalation of 5.72 percent from the second year.

The current tariff order doesn’t mention solar thermal projects. Mercom had previously reported that with the widespread adoption of solar PV and no investment or activity in solar thermal (CSP), even after issuing three tariff orders, this year the TNERC proposed to do away with the exercise of coming up with a generic tariff for solar thermal power projects.

Recently, Mercom reported that TNERC proposed a benchmark tariff of ₹3.11 (~$0.047)/kWh without accelerated depreciation (AD) for solar power and ₹2.86 (~$0.043)/kWh without AD for wind.

Tamil Nadu is already one of the top solar states in India with over 1.7 GW of installed solar capacity, according to Mercom’s India Solar Project Tracker.