The Uttarakhand Electricity Regulatory Commission (UERC) has retained the generic tariff for solar projects for projects commissioned during the financial year (FY) 2026-27.

The Commission retained the tariff of ₹4.10 (~$0.0428)/kWh after reviewing the benchmark capital costs for solar, solar thermal, canal bank solar, canal top solar, rooftop, and small solar projects, and battery energy storage systems.

The Commission had earlier proposed a benchmark capital cost of ₹28.53 million (~$300,098) /MW and a generic tariff of ₹3.96 (~$0.0413)/kWh for solar projects.

However, stakeholders raised concerns about module price volatility, exchange rate fluctuations, higher metal prices, transportation costs, and Uttarakhand-specific challenges, including hilly terrain, fragmented land availability, and higher civil and structural costs.

Stakeholders also cited the expected cost impact of the Approved List of Models and Manufacturers and domestic content requirement compliance from June 1, 2026.

After reviewing the submissions, the Commission decided to extend the previous year’s solar tariff of ₹4.10 (~$0.0428)/kWh for FY 2026-27.

The Commission clarified that benefits or incentives availed by developers under the Micro, Small, and Medium Enterprises (MSME) policy framework will not be adjusted against the benchmark capital cost or generic tariff of solar projects unless the incentive is directly linked to renewable energy generation or specifically intended for solar project development.

For solar projects receiving a subsidy, incentive, or rebate directly linked to the development of solar power projects, the gross tariff and net tariff will decrease by ₹0.0159 (~$0.00017)/kWh and ₹0.0149 (~$0.00016)/kWh, respectively, for every 1% of capital subsidy.

The Commission said issues raised by Mukhyamantri Saur Swarozgar Yojana applicants seeking protection of the earlier ₹4.64 (~$0.0484)/kWh tariff will be dealt with separately.

It held that the current proceeding was limited to determining benchmark capital cost and generic tariffs for FY 2026-27.

The Commission retained a tariff of ₹2 (~$0.0208)/kWh for grid-interactive rooftop and small solar projects under net metering arrangements. No stakeholder objections were received on the proposed tariff.

For canal bank solar projects, the Commission approved a levelized tariff of ₹4.10 (~$0.0428)/kWh for FY 2026-27, down from ₹4.31 (~$0.045)/kWh in FY 2025-26.

The tariff was brought in line with ground-mounted solar projects. The Commission said canal bank projects currently being developed in the state do not involve engineering complexities, specialized design requirements, or additional structural arrangements.

For canal top solar projects, the Commission approved a generic tariff of ₹4.20 (~$0.0438)/kWh for FY 2026-27, down from ₹4.48 (~$0.0468)/kWh in FY 2025-26.

The Commission approved a solar thermal tariff of ₹11.82 (~$0.123)/kWh for FY 2026-27 after adjusting accelerated depreciation, down from ₹11.90 (~$0.1248)/kWh in FY 2025-26. It also said it was not inclined to determine tariffs for solar thermal technologies from FY 2027-28 onward because no such projects have been developed since tariff determination began in FY 2013-14, and the technology remains costlier.

For battery energy storage systems, the Commission approved generic capacity charges of ₹259,244 (~$2,706)/MW/month for systems commissioned during FY 2026-27. The approved capacity charge is slightly higher than the draft proposal of ₹254,583 (~$2,657)/MW/month, but lower than the earlier benchmark of ₹396,747 (~$4,144)/MW/month cited by Uttarakhand Power Corporation.

Stakeholders argued that the proposed BESS tariff of ₹254,583 (~$2,657)/MW/month did not account for lithium price volatility, exchange rate fluctuations, augmentation and replacement needs, and Uttarakhand-specific deployment challenges. Uttarakhand Jal Vidyut Nigam also submitted that tenders for projects at Dhakrani, Tiloth, Khatima, and Pathri had already been floated based on the earlier tariff framework.

The Commission declined to change the proposed BESS benchmark capital cost, citing declining market-discovered tariffs in recent standalone BESS tenders. It said benchmark tariffs must reflect market conditions and technology cost reductions to protect consumer interests.

The approved BESS capacity charges will apply only to projects commissioned within 18 months of the order date. The Commission said utilities must act proactively and finalize BESS tenders within a reasonable time.

This April, UERC raised tariffs for some industrial-category power consumers and retained tariffs for commercial-category power consumers for FY 2026-27.

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