Maharashtra Electricity Regulatory Commission (MERC) has approved the tariff for procurement of 400 MW solar power by the Maharashtra State Electricity Distribution Company Ltd. (MSEDCL). The tariff of ₹2.79 per unit has been accepted after a competitive bidding process. The power will be sourced from intra-state grid-connected solar projects and supplied by Avaada Energy Pvt. Ltd. (AEPL) for a period of 25 years.
MSEDCL had floated a tender on 14 February 2023 for 500 MW of solar power with an option to extend it by another 500 MW under the green shoe option. The bidding was conducted on the Bharat-ETS web portal through an e-reverse auction process. A total of seven companies submitted bids for a total capacity of 1475 MW. After evaluating the bids, six were found to be eligible for the reverse auction, and AEPL was one of them.
Initially, AEPL had quoted a tariff of ₹2.88 per unit but later agreed to match the lowest bid of ₹2.87 per unit. On 20 February 2024, AEPL voluntarily revised the tariff downward to ₹2.79 per unit, which was then considered competitive by MSEDCL. MSEDCL justified this procurement by stating the shortage of Available Transmission Capability (ATC) for inter-state power and its obligation to meet Renewable Purchase Obligation (RPO) targets.
According to MSEDCL, the final tariff of ₹2.79 per unit is lower than the average power purchase cost of ₹4.81 per unit for FY 2023–24. It is also lower than the earlier approved intra-state solar tariff of ₹2.90–2.91 per unit in May 2023. The Commission noted that the tariff was discovered in a transparent process and that the rates are competitive in comparison to national-level bids when local cost factors are considered.
The Commission confirmed that the bidding process followed the Ministry of Power’s guidelines dated 3 August 2017 and its amendments. It also acknowledged that the solar capacity was accounted for in MSEDCL’s Resource Adequacy Plan for the year 2025–26 and will help bridge a cumulative shortfall of 8525 million units in meeting solar RPO targets till FY 2022–23.
The order, issued on 14 May 2025, allows MSEDCL to proceed with signing a Power Purchase Agreement (PPA) with AEPL for the 400 MW capacity. The electricity procured under this agreement will be eligible for fulfilling MSEDCL’s RPO targets, including any past shortfalls.
The approval of ₹2.79/kWh tariff for intra-state solar power procurement was granted after validating the competitiveness of the rate, transparency of the bidding process, and the pressing need to meet regulatory obligations and consumer demand in Maharashtra.
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