Andhra Pradesh Approves 1,162.8 MW Solar Power For Feeder-Level Agricultural Solarisation Under PM-KUSUM

The Andhra Pradesh Electricity Regulatory Commission (APERC) has formally approved the long-term procurement of 1,162.8 MW of solar power under Component-C of the PM-KUSUM scheme to support feeder-level solarization of agricultural feeders in the State. The approval follows a detailed examination of submissions made by the three distribution companies—APSPDCL, APCPDCL, and APEPDCL—and a public hearing held on 5 December 2025. The official order was issued on 17 December 2025, marking a significant step toward strengthening renewable energy adoption for agricultural power supply in Andhra Pradesh.

Under the approved plan, the three DISCOMs will procure solar power through grid-connected solar photovoltaic projects to be set up near distribution substations. These projects will operate in the RESCO mode, supplying power directly at the feeder or substation level to support daytime agricultural electricity demand. The scheme is expected to cover a total of 2.93587 lakh agricultural pump sets, although the Ministry of New and Renewable Energy (MNRE) has currently sanctioned 2 lakh pump sets. Approval for the remaining pump sets will be obtained separately in due course.

The total solar capacity of 1,162.8 MW will be distributed across the three DISCOMs, with APSPDCL accounting for 751 MW, APCPDCL for 191.5 MW, and APEPDCL for 220.3 MW. This capacity was discovered through tariff-based competitive bidding at the circle level. After negotiations with successful bidders and consideration of regulatory directions, the weighted average tariff for these projects across the State was finalized at approximately ₹3.17 per unit.

During the public consultation, several objections were raised, including concerns about higher tariffs, surplus power, the impact on non-agricultural consumers, and the recent reduction of GST on renewable energy equipment. The Commission carefully reviewed these concerns and concluded that feeder-level solarization is both necessary and economically justified, given Andhra Pradesh’s projected power deficits, increasing demand, and renewable purchase obligations. Decentralized solar generation near substations was recognized as beneficial because it reduces transmission losses, avoids inter-state transmission charges, and substitutes for higher-cost marginal power procurement.

A major issue addressed by the Commission was the reduction of GST on renewable energy equipment from 12% to 5%, effective September 2025. Recognizing this as a “change in law,” the Commission estimated that the GST reduction leads to a net capital cost reduction of about Rs. 14 lakh per MW, resulting in a tariff reduction of around 11 paise per unit. Consequently, a ceiling tariff of Rs. 3.09 per unit was fixed for the feeder-level solarization projects. Projects with tariffs at or below this level will remain unchanged, while those with higher tariffs may receive limited adjustments based on certified expenditure incurred before the GST change.

The Commission also directed that all solar projects under the scheme must connect only at the 11 kV busbar of 33/11 kV substations. It further instructed the DISCOMs to incorporate suggested modifications into their power purchase agreements and explore integrating distributed battery energy storage systems at substations, following applicable regulations.

With these approvals and conditions, the three DISCOMs are now authorized to proceed with the implementation of 1,162.8 MW of solar projects under PM-KUSUM Component-C. This decision not only supports the efficient daytime supply of electricity to agricultural pumps but also strengthens the State’s renewable energy portfolio and ensures proper regulatory oversight for future feeder-level solarization initiatives in Andhra Pradesh. The move is expected to improve grid stability, reduce power costs, and promote the adoption of clean energy solutions for the agricultural sector.