The Rajasthan Electricity Regulatory Commission has issued an important order related to Petition No. RERC/2279/2024, which was filed by Rajasthan Urja Vikas & IT Services Limited. This petition requested the Commission to review and revise the already determined tariff for solar power projects being developed under the PM-KUSUM Component-A scheme. The issue came up because of recent market conditions, especially the noticeable drop in the cost of non-DCR solar modules and other overall plant expenses.
Another reason behind the petition was a direction given by the Commission in an earlier order dated January 27, 2023. The tariff decision affects Solar Power Generators, farmer groups, and developers involved in decentralized solar power generation meant to support agricultural feeder solarization in Rajasthan.
The petitioner represented the state’s electricity distribution companies and argued that the fixed tariff approved earlier was no longer suitable. According to them, the cost of setting up solar power projects has reduced significantly, which justifies lowering the tariff. The Discoms explained that keeping the old tariff would place an unnecessary financial burden on the power distribution system and, ultimately, on consumers. They also put forward a new way of calculating the tariff that would reflect the reduced capital costs and the current market situation. Instead of continuing with the fixed tariff, they asked for a mechanism that adjusts according to the new cost realities of solar power development.
However, several respondents, including Kisan Urja Hitkari Samiti and other solar power developers, opposed the petition. They argued that although module prices may have fallen, many other expenses involved in executing solar projects have increased. These include land-related investments, financing costs, installation work, and infrastructure needed to ensure grid integration. They also mentioned that challenges such as delays, technical constraints, and rising costs in various supporting components have reduced the expected financial benefits. Because of these real challenges, they felt that reducing the tariff would make many projects unviable and also discourage participation in the KUSUM scheme, which aims to benefit farmers and promote reliable solar power for agriculture.
The Commission examined the written submissions, financial details, counter-arguments, and the information presented in the hearings held on January 23, 2025, July 8, 2025, and September 26, 2025. The order issued by the Rajasthan Electricity Regulatory Commission carefully balances the interests of the Discoms and the developers. The Commission acknowledged the need to maintain the financial stability of the power distribution system, and at the same time, it recognized the importance of supporting the solar developers who are key to the success of the KUSUM scheme. The Commission also addressed the issue of how the revised tariff should apply to projects that are at different development stages.
Based on its assessment, the Commission has decided to introduce a new levelized tariff structure for PM-KUSUM Component-A projects. This revised tariff is considered fair, competitive, and realistic, given the current situation of solar power costs in the state. It is designed to provide an appropriate return to developers while ensuring that power purchase costs remain reasonable for the Discoms. The new tariff will replace the previously determined tariff and will apply to all PM-KUSUM Component-A projects going forward. With this decision, the Commission aims to support continued growth in decentralized solar power under the KUSUM program while maintaining a stable and affordable electricity supply framework for Rajasthan.
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