The Rajasthan Electricity Regulatory Commission has approved the levelized tariff for four solar power projects with a combined capacity of 12.02 MW under Component-C of the PM-KUSUM Scheme. The petition was filed by Jaipur Vidyut Vitran Nigam Limited (JVVNL) under Section 63 of the Electricity Act, 2003, seeking approval of the tariff discovered through a transparent competitive bidding process.
The PM-KUSUM Scheme, initiated by the Ministry of New and Renewable Energy (MNRE), aims to support farmers by promoting solar energy through feeder-level solarization. It consists of three components, with Component C focused on solarizing grid-connected agricultural pumps. JVVNL launched Tender TN-09 for this purpose, receiving a considerable response from bidders. Among them, M/s KNY Projects Pvt. Ltd. submitted bids for four solar plants and later raised concerns about the non-acceptance of their bids.
Initially, JVVNL did not issue a Letter of Intent (LoI) to the company due to concerns related to the use of Domestic Content Requirement (DCR) panels. However, upon further communication and unconditional acceptance of counter-offered tariffs by the company, JVVNL presented the case for approval.
The accepted levelized tariffs for the four plants ranged from ₹3.172/kWh to ₹3.310/kWh. These were finalized after detailed calculations that considered market-based capital costs, DCR conditions, land lease costs, and Central Financial Assistance (CFA) provided by MNRE. For instance, the tariff for the Mishroli plant was set at ₹3.172/kWh, and for the Malakhera plant at ₹3.310/kWh.
To determine the tariffs, JVVNL followed the financial principles laid out in the RERC’s 2020 regulations. Key parameters included a 25-year useful life for solar plants, a debt-equity ratio of 70:30, a minimum Capacity Utilization Factor (CUF) of 19%, interest rates of 10.50% for loans, depreciation rates, return on equity at 16.47%, and working capital requirements.
Additional considerations included land lease rates, degradation factors for solar modules, and the cost of remote monitoring systems (RMS). The CFA was calculated based on the MNRE’s cap of 7.5 HP for pump capacity, which impacted the final support amount received for each plant.
The Commission reviewed JVVNL’s submission and found that due diligence had been followed in the bidding and negotiation process. The tariffs were aligned with previous tenders and market trends. Moreover, JVVNL provided a compliance report responding to earlier directives, confirming ongoing system studies and alignment with MNRE guidelines, including DCR mandates.
The Commission observed that clustering of substations in tenders, as attempted in TN-10, should be further explored to lower costs. It also directed Discoms to continue using domestically manufactured modules, to avoid liabilities from change-in-law events, and to ensure regular reporting on project progress.
The order concluded with a directive for all Discoms in Rajasthan to adopt similar practices for tariff discovery, compliance with MNRE rules, and timely implementation of projects under the PM-KUSUM Scheme. The petition was officially approved and disposed of by the Commission.
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We wish to bring to your attention that the information in this article is no longer accurate. Petition No. RERC/2279/2024, filed by Rajasthan Urja Vikas & IT Services Limited (RUVITL) seeking revision of the determined tariff for solar power projects under the PM-KUSUM Component-A scheme, has since been dismissed by the Rajasthan Electricity Regulatory Commission (RERC) both on the ground of maintainability and on merits. The original order granting benefits to the Solar Power Generators and Kisan Urja Hitkari Samiti therefore stands upheld. We request that this article be updated or a corrigendum be issued to reflect the correct legal position. The dismissal order is available on the RERC official website at rerc.rajasthan.gov.in.