GSECL Seeks ₹1.87/kWh Tariff Approval For 40 MW Pachham Solar Project In Gujarat

In March 2019, the Government of Gujarat introduced a policy to promote solar power by allocating wasteland near GETCO substations to Public Sector Undertakings at a nominal lease rate. Under this plan, Gujarat State Electricity Corporation Limited (GSECL) was assigned the responsibility of developing 2,500 MW of solar capacity, with 50% of the project cost to be supported through a state capital subsidy.

As part of this initiative, a 40 MW solar project at Pachham was awarded to Tata Power Solar Systems Ltd. through a competitive bidding process. The project was implemented in two phases. The first phase of 25 MW was commissioned on December 9, 2022, while the remaining 15 MW was commissioned later on April 18, 2025.

The total capital cost of the project has been finalized at ₹205.13 crore. This amount includes costs related to equipment supply, construction work, infrastructure upgrades, and applicable GST variations. The funding structure is based on an expected 50% capital grant from the state government, while the remaining 50% is to be funded by GSECL. However, the subsidy disbursement is still pending.

For tariff determination, only 50% of the total project cost, which is ₹102.57 crore, has been considered as per regulatory norms. The project follows a normative debt-equity ratio of 70:30 and allows a return on equity of 14%. The operational life of the project has been set at 25 years.

GSECL has filed a petition before the Gujarat Electricity Regulatory Commission under Sections 62 and 86 of the Electricity Act, 2003. Although new tariff regulations were introduced in 2024, GSECL has requested that the project be evaluated under the GERC (MYT) Regulations, 2016, since the project was planned and executed during that period.

Based on these parameters, the company has proposed a levelized tariff of ₹1.87 per unit for the entire 25-year period. The tariff calculation includes depreciation at 5.28% for the first 12 years, operation and maintenance expenses based on a 10-year contract with an annual escalation of 5.25% thereafter, and interest on working capital at 11.07%.

In its petition filed on March 17, 2026, GSECL has requested approval of the total project cost and the proposed tariff. It has also sought relaxation for early commissioning by requesting full tariff payment for electricity generated from the first 25 MW phase before the scheduled commercial operation date. The matter is currently under review by the Commission for admission and further hearing.