CERC Approves ₹2.45/kWh Tariff For SECI’s 1200 MW Solar Project Under CPSU Scheme

The Central Electricity Regulatory Commission (CERC) has passed an order on a petition filed by Solar Energy Corporation of India Limited (SECI) regarding the adoption of usage charges for a 1200 MW solar power project under Tranche-III of the CPSU Scheme Phase-II. The project is part of the government’s broader target to set up 12,000 MW of grid-connected solar capacity across India.

The scheme is designed to support solar projects developed by government entities, with power used either for their own needs or supplied to other government bodies and distribution companies. It also includes Viability Gap Funding (VGF) to reduce the cost burden and promote the use of domestically manufactured solar components.

The bidding for this tranche was conducted by Indian Renewable Energy Development Agency Limited (IREDA). SECI had initially participated in the bidding process for 1200 MW but was not selected because its quoted VGF was higher than the lowest bid. Later, after receiving ₹1000 crore as equity support from the government, SECI requested an allocation of 1200 MW by matching the lowest VGF rate discovered in the auction.

This proposal was approved by the Ministry of New and Renewable Energy (MNRE) in December 2021, and IREDA issued the Letter of Award. During the process, a major development occurred when the government increased the GST on renewable energy equipment from 5 percent to 12 percent in September 2021. This was treated as a “Change in Law” event.

To address the impact of this increase, MNRE revised the ceiling tariff for usage charges from ₹2.45 per unit to ₹2.57 per unit. SECI signed Power Usage Agreements at this revised rate with Madhya Pradesh Power Management Company Limited and Gujarat Urja Vikas Nigam Limited.

While reviewing the case, CERC noted that existing guidelines allow only up to 50 MW additional allocation without fresh bidding. However, MNRE used its special powers to grant the entire 1200 MW capacity to SECI. The Commission expressed concern that SECI did not clearly mention the provision used for this allocation, highlighting the need for transparency.

CERC approved the usage charges at ₹2.45 per unit and allowed a VGF of ₹0.55 crore per MW. It also permitted SECI to file a separate petition to claim compensation for the GST impact. Meanwhile, provisional charging at the revised rate has been allowed, ensuring that the project moves forward in states like Andhra Pradesh, Madhya Pradesh, and Gujarat.