TNERC Sets New Benchmark Tariff of Rs.4.50 (~$0.069)/kWh for Solar PV Projects in Tamil Nadu


The Tamil Nadu Electricity Regulatory Commission (TNERC) has set Rs.4.50 (~$0.066)/kWh as the new benchmark tariff for solar PV projects and Rs.10.19 (~$0.157)/kWh for solar thermal projects without accelerated depreciation (AD). The AD component of the tariff has been fixed at Rs.0.09 (~$0.0014)/kWh for solar PV and Rs.0.21 (~$0.0032)/kWh for solar thermal.

The new benchmark tariff without AD is 12 percent less than the previous benchmark tariff of Rs.5.10 (~$0.079)/kWh. The new order is in effect from April 1, 2017.

The TNERC has calculated the capital cost at Rs.47 million (~$0.73 million)/MW for Solar PV power projects, compared to Rs.50 million (~$0.774 million)/MW last year.

Karnataka Electricity Regulatory Commission (KERC) last week set a benchmark tariff of Rs.4.36 (~$0.064)/kWh grid-connected large-scale solar projects for financial year (FY) 2017-18.

Benchmark tariff is set by central and state regulatory commissions yearly. These tariffs act as the upper limit for reverse auctions conducted by central and state agencies. The benchmark tariff mostly acts as a guideline, as actual winning bids are typically much lower. However, Tamil Nadu is generally considered the riskiest state for solar projects due to late-payment and curtailment issues.

Mercom previously reported, the TNERC issued a draft solar tariff order inviting comments and suggestions. According to Mercom’s India Solar Project Tracker, Tamil Nadu has 1.6 GW of installed solar capacity and over 500 MW of development pipeline.

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