UERC Retains Solar Tariff At ₹4.10/kWh, Finalizes BESS Charges For FY 2026-27 In Uttarakhand

The Uttarakhand Electricity Regulatory Commission (UERC) has issued a significant suo-moto order finalizing benchmark capital costs and generic tariffs for solar power and battery energy storage projects for the financial year 2026-27. The order, signed by Chairman M. L. Prasad along with commission members Anurag Sharma and Prabhat Kishor Dimri, aims to support renewable energy development in the state while protecting consumer interests.

Before reaching its final decision, the commission reviewed comments and suggestions from 36 stakeholders, including government agencies, renewable energy developers, engineering firms, and industry representatives. Many stakeholders pointed out that renewable energy projects in Uttarakhand face unique challenges due to the state’s hilly terrain, fragmented land holdings, and difficult transportation conditions. These factors significantly increase project development and construction costs compared to projects in plain regions. Concerns were also raised regarding fluctuations in global equipment prices, currency exchange rates, and the expected shift toward domestically manufactured components under the Approved List of Models and Manufacturers (ALMM) framework.

Taking these challenges into account, the commission decided to maintain stability in the tariff structure. It retained the generic tariff of Rs. 4.10 per kWh for ground-mounted Solar PV projects for FY 2026-27, instead of reducing it as proposed in the draft order. The commission also clarified that incentives provided under the state’s MSME policy would not be deducted from solar tariffs. This decision allows developers to continue benefiting from industrial subsidies without affecting project revenues.

The commission also finalized tariffs for different solar project categories. Canal Bank solar projects have been assigned the same tariff of Rs. 4.10 per kWh as standard ground-mounted projects after assessments showed that most such installations are located on relatively flat land near canals. Canal Top solar projects were given a tariff of Rs. 4.20 per kWh. For rooftop solar systems and small grid-connected projects operating under net-metering arrangements, the tariff has been fixed at Rs. 2.00 per kWh to encourage consumer participation in clean energy generation. Meanwhile, the tariff for solar thermal power projects has been set at Rs. 11.82 per kWh. However, the commission announced that it will discontinue determining tariffs for solar thermal technology from the next financial year due to its limited adoption and high costs.

The order also addresses Battery Energy Storage Systems (BESS), a growing segment of the renewable energy sector. Based on a benchmark capital cost of Rs. 160 lakh per MW, the commission fixed BESS capacity charges at Rs. 2,59,244 per MW per month. While some stakeholders expressed concerns about future cost fluctuations, particularly in lithium markets, the commission noted that developers would continue to benefit from central government Viability Gap Funding support. The commission also stressed the need for faster implementation, stating that these BESS tariffs will only apply to projects commissioned within 18 months, urging utilities to accelerate project execution and tender processes.