Rajasthan Discoms Seek Approval For Pre-Fixed Tariff On 5,000 MW Solar Projects Under PM-KUSUM Component A

The Rajasthan Electricity Regulatory Commission (RERC) has received a petition seeking approval for a pre-fixed levelized tariff for 5,000 MW of solar power projects under Component A of the PM-KUSUM scheme. The petition has been filed by one of the three power distribution companies (Discoms) in Rajasthan, responsible for distributing and supplying electricity across its service area.

The PM-KUSUM scheme, launched by the Ministry of New and Renewable Energy (MNRE), aims to promote renewable energy adoption among farmers. It has three key components: setting up decentralized grid-connected solar plants, installing standalone solar-powered agricultural pumps, and solarizing grid-connected pumps. MNRE had earlier issued guidelines for implementing these components and later released revised comprehensive guidelines in 2024. Under these revised guidelines, Rajasthan received an additional allocation of 5,000 MW of solar capacity. This allocation has been distributed among the state’s three Discoms, with JVVNL Jaipur receiving 1,500 MW, AVVNL Ajmer receiving 1,000 MW, and JdVVNL Jodhpur receiving 2,500 MW.

The petition proposes that the same methodology used for determining the tariff of 1,000 MW under the previous allocation be followed for the newly sanctioned 5,000 MW, with some amendments. The levelized tariff has been computed considering MNRE guidelines, RERC regulations, and prevailing market trends. The petitioner has based the capital cost on inputs from solar module manufacturers and vendors. Since the project consists of multiple plants ranging from 0.5 MW to 2 MW, the capital cost has been calculated separately for variable and fixed components.

The useful life of the solar plants has been considered as 25 years, with a debt-equity ratio of 70:30. A capacity utilization factor of 17% has been assumed based on past experience. The petitioner has proposed an interest rate of 11% per annum for loan repayment. Depreciation has been calculated with a salvage value of 10% of the project cost. The return on equity has been considered at 16.47% for the entire project duration. Annual operation and maintenance expenses have been set at ₹5 lakh per MW, with an escalation rate of 3.84%.

The petition also accounts for the installation of a remote monitoring system (RMS) for all solar projects under the scheme. The RMS cost includes a fixed charge of ₹75,000 per system with replacements every eight years and a monthly internet connectivity cost of ₹100. Land lease rent has been set at ₹80,000 per hectare per year, with a 5% increase every two years.

Based on these calculations, the petitioner has determined a levelized tariff of ₹3.04 per unit for a 1 MW solar PV project. This tariff is lower than the current average variable power purchase cost of the Discoms, making it a cost-effective solution. The petitioner argues that the proposed tariff will help reduce power purchase costs, improve renewable purchase obligations, ensure better power availability during peak hours, and enhance the voltage profile in rural areas.

The petition requests the commission to approve the pre-fixed levelized tariff for the additional 5,000 MW allocation and allow modifications if needed. It also seeks permission to make further submissions and clarifications as required.