KERC Revises Solar Feed-In Tariffs For Distributed Solar Photovoltaic And SPV Projects In Karnataka

Karnataka Electricity Regulatory Commission (KERC) has issued a revised generic feed-in tariff framework for Distributed Solar Photovoltaic (DSPV) and Solar Photovoltaic (SPV) projects across the state. The order, issued on August 25, 2026, will apply from the same date and remain effective until June 30, 2029.

The revised tariffs are aimed at increasing the adoption of distributed solar, particularly among residential consumers. Karnataka had 6,354.74 MW of solar capacity under power purchase agreements as of April 2026, while distributed solar accounted for only 920.74 MW. KERC noted the need to expand smaller-scale solar installations and encourage more consumers to participate in power generation.

For non-subsidised domestic consumers, KERC has fixed a levelised tariff of Rs. 3.89 per unit for solar installations between 1 kW and 10 kW. The tariff is based on a benchmark capital cost of Rs. 45,000 per kW.

Separate tariffs have been introduced for households covered under the PM Surya Ghar Muft Bijli Yojana. Systems between 1 kW and 2 kW will receive a tariff of Rs. 1.96 per unit, while systems above 2 kW and up to 3 kW will have a tariff of Rs. 2.14 per unit. Capacity additions exceeding 3 kW will receive Rs. 2.58 per unit.

For commercial, industrial and other non-domestic consumers, tariffs have been differentiated according to the use of Domestic Content Requirement (DCR) and non-DCR solar modules. Projects using DCR solar cells will receive Rs. 3.11 per unit, based on a benchmark capital cost of Rs. 36,015 per kW. Projects using non-DCR modules will receive Rs. 2.34 per unit, based on a capital cost of Rs. 27,090 per kW.

Consumers seeking the DCR tariff will be required to undergo technical inspection and obtain certification from the concerned distribution licensee.

KERC has adopted several normative assumptions for determining the tariffs, including a 25-year project life, 19% capacity utilisation factor, 70:30 debt-equity ratio, 14% return on equity and a 13-year debt repayment period.

The Commission has also fixed tariffs for Virtual Net Metering and Group Net Metering at 75% of the standard non-domestic tariff. To ensure continuity during the transition, KERC extended the validity of its earlier July 2025 order until August 24, 2026.

The revised framework is expected to provide clearer tariff signals and support wider deployment of distributed solar across Karnataka, particularly among households and smaller commercial consumers.