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Kerala Commission Approves Tariff Rate Of Rs 3.50/Kwh For 5.5 MW Solar Capacity Under PM-KUSUM Program


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In a recent order, Kerala Electricity Regulatory Commission (KERC) approved discovered tariff rate of Rs.3.50/Kwh for 5.5 MW solar capacity under PM-KUSUM Component-A scheme in the state of Kerala. The commission also ask for clarification in the matter of lease rate at the rate of Rs.0.20/Kwh, to be paid to the farmer whose land was leased out or rented by the Kerala State Electricity Board Limited (KSEBL) for 25 years.

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In view of the Ministry of Natural and Renewable Energy (MNRE’s) PM-KUSUM program, MNRE allotted total 40MW solar capacity to the state of Kerala under PM-KUSUM, Component-A scheme. Under the allotted capacity, KSEBL invited tender for the total 40MW capacity under Component-A of PM-KUSUM program. Three bidders participated in the bid namely M/s. Luster Solar Projects (2 MW), M/s. Solaria Energy Solutions (2 MW), Mrs. Pearl Mithun (1.5MW), with total 5.5MW capacity out of total 40MW capacity. All the bidders agreed to match the rates at Rs 3.50/units. The details of the discovered tariff rate given below.

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Sl No.Bidder DetailsDetails Of The BidderCapacity Offered (MW)Distance From The SubstationPrice Quoted In the Bid (Rs)Price Offered In the Bid (Rs)
(Group of farmers)
– 4 farmers in
partnership deed
for investment.
(Koshy P Jacob,
Parathode Antony,
Soma Prince, PM
Managing Partner
– Koshy P Jacob

1-1.5Km3.66 Rs/Kwh3.50 Rs/Kwh
(Group of farmers)
– 4 farmers in
partnership deed
for investment.
(Grace Antony,
Ashwin Antony,
Albert Antony,
Ishrine Sayed
Fathima –
Managing Partner
– Grace Antony
21 to 1.5Km3.66 Rs/Kwh3.50 Rs/kwh
3Mrs. Pearl
Individual farmer1.52.5 Km3.59 Rs/Kwh3.50 Rs/Kwh
4Total Capacity5.5 MW

Further, KSEBL will pay Rs.0.20/Kwh lease rent to the farmer of the plant’s land for 25 years time period from the commissioning date of the project. KSEBL will also get Rs.0.40/Kwh procurement based incentive (PBI) or Rs 6.6 lac/MW whichever is lower. The PBI will be valid for 5 years from the date of commissioning of the project. The connectivity of the proposed solar plants will be under 110Kv Rayonpuram substation.

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In the context of the above circumstances, KSEBL submitted the following prayers to the commission.

a. Approve the discovered tariff rate of Rs. 3.50/Kwh for the total 5.5 MW solar capacity under PM-KUSUM Component A scheme.

b. Approve the power purchase agreement between the successful bidders and KSEBL for the total 5.5 MW solar capacity.

Commission’s Analysis & Order

After analyzing all inputs received from KSEBL and MNRE’s regulation under PM-KUSUM program, the commission observed the following points pertaining the KSEBL’s petitions.

a. The discovered tariff of Rs.3.50/Kwh is well below the commission’s approved ceiling tariff of Rs.3.66/Kwh for PM-KUSUM Component-A scheme.

b. As the KSEBL will be eligible for procurement based incentive (PBI) at Rs.0.40/Kwh or Rs.6.6Lac/MW whichever is lower, for 5 years from the date of commissioning, the effective tariff rate comes out to be Rs 3.10/Kwh.

c. KSEBL will have sufficient time for commissioning as MNRE has extended the commissioning time line up to 31st Dec 2022.

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d. All the proposed solar power plant’s connectivity will be under 110Kv Rayonpuram substation.

In view of the above observation the commission approved the discovered tariff rate of Rs.3.50/Kwh for the total 5.5MW capacity. The commission also asked for clarification whether the lease rent of Rs0.20/Kwh is included in the discovered tariff rate or not. KSEBL have to submit draft PPA for their approval.

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