Uttar Pradesh Cuts Cross Subsidy, Wheeling and Transmission Charges for Solar Projects

Solar projects will see cross subsidy surcharge, wheeling and transmission charges reduced based on certain provisions in Uttar Pradesh


The Uttar Pradesh Electricity Regulatory Commission (UPERC) has amended its Captive and Renewable Energy Generating Projects (CRE) Regulations 2014 with changes that are expected to reduce the cost of solar power procured from standalone projects in the state.

Costs are expected to decline because UPERC has eased the transmission charges that must be paid by standalone solar projects. The amendment also includes changes to provisions in Clause 33 and Clause 34 of CRE Regulations.

The Clause 33 provisions states: “For the sale of power from standalone solar projects to distribution companies (DISCOMs) or third party or captive consumption, there will be exemption of 50 percent on wheeling charges and transmission charges on intrastate sale of power.”

For the interstate sale of solar power by the intrastate transmission system, there will be a 100 percent exemption from wheeling charges and transmission charges. The exemption will be applied in accordance with the technical feasibility and UPERC regulations.

For Clause 34, the provision reads: “For sale of power from standalone solar projects to distribution companies (DISCOMs) or third party or captive consumption, there will be 100 percent exemption from state cross subsidy surcharge for interstate sale of solar power.”

The amendments came into force from March 21, 2018.

Uttar Pradesh imports power to satisfy its increasing energy needs and the amendments are poised to make solar a lower cost source of electricity. UPERC has been proactive in forming and revising its policies to ensure the growth of its solar sector.

To further the rooftop solar industry, in the past, UPERC also proposed using an aggregator model to support the installation of rooftop solar for groups of consumers under the net-metering policy.

Recently, UPERC also approved certain modifications to the competitive bidding guidelines issued by the Ministry of New and Renewable Energy (MNRE) for solar PV projects. The modifications are set to improve the implementation of 1 GW of grid-connected solar PV projects by Uttar Pradesh’s New and Renewable Energy Development Agency (UPNEDA).

Saumy Prateek Saumy is a senior staff reporter with MercomIndia.com covering business and energy news since 2016. Prior to Mercom, Saumy was a copy editor at Thomson Reuters. Saumy earned his Bachelors Degree in Journalism & Mass Communication from the Manipal Institute of Communication at Manipal University. More articles from Saumy Prateek.