Himachal Pradesh Electricity Regulatory Commission Sets Tariff Courses For Solar PV Projects In FY 2024-25

The Himachal Pradesh Electricity Regulatory Commission recently finalized the generic levelized tariffs for Solar PV projects for the fiscal year 2024-25. The Commission undertook a thorough process involving stakeholder consultations, objections, and public hearings to arrive at these determinations.

In response to stakeholder feedback, the Commission acknowledged the declining trend in the cost of Solar PV modules. It recognized the impact of government incentives like the Production Linked Incentive (PLI) and other budgetary measures, which are expected to further reduce module prices. Additionally, advancements in technology are enhancing module efficiency and reducing space requirements for installation.

Considering these factors, the Commission decided to increase the normative cost of Solar PV modules and other project components. This adjustment aims to reflect market realities and promote competitiveness in solar power generation. The Commission emphasized the need for tariffs to align with those determined through competitive bidding at national and state levels.

Furthermore, the Commission addressed concerns regarding smaller solar projects by allowing an escalation in the basic cost and other associated expenses. It recognized that while economies of scale might slightly increase costs for smaller projects, there could be savings in other areas. This decision aims to encourage the establishment of solar projects, particularly in urban and industrial areas, to optimize power distribution.

In determining operational and maintenance (O&M) expenses, the Commission accounted for annual escalation and considered a Capacity Utilization Factor (CUF) of 21%. It also factored in auxiliary consumption, transformation losses, and project line losses.

The Commission’s decision on generic levelized tariffs is guided by regulations ensuring fairness and transparency in tariff determination. These tariffs apply to grid-connected Solar PV projects utilizing approved technologies, excluding any capital subsidies or incentives. However, adjustments may be made following regulations to accommodate subsidies or grants.

It’s important to note that these tariffs do not apply to projects procuring power through Solar Energy Corporation of India or competitive bidding, nor to projects installed by consumers under net metering schemes.

The Commission’s determination of generic levelized tariffs for Solar PV projects reflects a balance between market dynamics, technological advancements, and the need for competitive pricing. By considering stakeholder feedback and market trends, the Commission aims to foster the growth of solar power generation in Himachal Pradesh while ensuring fairness and transparency in tariff regulations.

Please view the document here for more details.