Himachal Pradesh Proposes New Generic Levelized Tariff for Solar PV Project for 2023-24 (1st October to 31st March)

Representational image. Credit: Canva

The Himachal Pradesh Electricity Regulatory Commission (HPERC) is taking steps to determine the Generic Levelized tariff structure for solar photovoltaic (PV) power projects for the financial year 2023-24, spanning from October 1, 2023, to March 31, 2024. This initiative falls under the Himachal Pradesh Electricity Regulatory Commission (Promotion of Generation from Renewable Energy Sources and Terms and Conditions for Tariff Determination) Regulations, 2017.


The HPERC had previously issued these regulations in November 2017, and they’ve been amended over time, with the latest changes becoming effective from October 1, 2023. These regulations establish financial principles for renewable energy technologies for the 4th control period (October 1, 2023, to March 31, 2027).


In alignment with these regulations, the 4th control period will begin on October 1, 2023, and the HPERC, in adherence to Regulation 18, is now proposing to determine the generic levelized tariff for solar PV projects and set the terms and conditions for this period.


Stakeholders and interested parties have been invited to provide their comments and suggestions regarding this proposal. The deadline for submitting feedback is October 18, 2023. Moreover, a public hearing to discuss this proposal will be held on October 19, 2023, starting at 11:30 AM.

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The HPERC has categorized solar PV plants and established technological norms for the financial year 2023-24. These norms are applicable from October 1, 2023, to March 31, 2024, and aim to ensure fair and efficient tariff determination.

Solar PV projects are categorized into three groups based on their capacity. The first category encompasses projects up to 5 MW, and they will follow the technological norms and tariffs determined by the Commission. The second category, also limited to 5 MW, will require Distribution Licensees to purchase power through competitive bidding or the Solar Energy Corporation of India. Projects with a capacity exceeding 5 MW fall under the third category.

For the financial year 2023-24, the Commission is considering a normative cost of ₹117.43 Lakhs/MW for solar PV modules. This cost will then be escalated by 15% to account for various factors. The average normative price of Solar PV Modules is estimated at ₹135.05 Lakhs/MW. The normative cost of other components remains unchanged at ₹216.30 per/MW. With these calculations, the normative capital cost of the project for this period works out to ₹351.35 Lakhs/MW.

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The Commission has set the Capacity Utilization Factor (CUF) at 21%. The gross generation will be reduced by 1.45% to account for auxiliary consumption, transformation losses, and project line losses up to the interconnection point.

The proposed generic levelized tariff for solar PV power projects applies to those directly converting solar energy into electricity using approved technologies. This tariff doesn’t account for capital subsidies, incentives, grants, or budgetary support, with adjustments carried out following the regulations.

The applicability of this tariff is determined by the date of a joint petition for approval of Power Purchase Agreements. In cases where the joint petition is submitted after October 1, 2023, but before March 31, 2024, the tariff applies to commissioned capacities on or before March 31, 2025. In other scenarios, where the Generic Levelized Tariff for 2023-24 needs to be considered, the Commission has outlined specific provisions.

This tariff will not be applicable when Distribution Licensees procure power through the Solar Energy Corporation of India or competitive bidding. It also does not apply to solar PV projects installed by consumers within their premises under the net metering scheme.

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The proposal aims to ensure a fair and efficient tariff structure for solar PV power projects during the specified period. It provides a framework to balance the interests of solar project developers and distribution licensees while promoting renewable energy generation in Himachal Pradesh.

Please read the document below for more details.

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