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Discussion paper for determination of tariff for Rooftop and Small kilowatt scale solar PV
plants
KARNATAKA ELECTRICITY REGULATORY COMMISSION
Date: 16
th
November, 2015
“Discussion paper for determination of tariff for Grid-Interactive Rooftop and
Small kilowatt scale solar photovoltaic plants in Karnataka’’
1. Preamble:
The Karnataka Electricity Regulatory Commission had issued an Order dated
10
th
October, 2013 on “Determination of Tariff for grid connected solar
photovoltaic, solar thermal and rooftop solar photovoltaic and other small solar
power plants”. The tariff determined in this Order is valid for projects entering
into Power Purchase Agreement (PPA) on or after 1
st
April, 2013 and upto 31
st
March, 2018 but excluding those projects for which the tariff is discovered
through bidding process.
Further, the Commission in its Order dated 30
th
July, 2015, has revised the tariff
for grid connected megawatt scale solar photovoltaic and solar thermal power
plants duly factoring the decline in capital cost. This has resulted in reduction in
tariff from Rs.8.40/unit to Rs.6.51/unit for solar PV plants and from Rs.10.92/unit to
Rs. 10.85/unit in respect of solar thermal plants effective from 1
st
September,
2015.
The Government of India (GoI), vide Resolution dated 1
st
July, 2015, has revised
the National Solar Mission targets from 20,000 MW to 1, 00,000 MW to be
achieved by the year 2021-22. This targeted capacity is proposed to be
achieved through deployment of 40,000 MW of Rooftop solar projects and
60,000 MW of large and medium-scale solar projects. This proposed capacity
addition of rooftop solar power is envisaged under the following categories:
1
Discussion paper for determination of tariff for Rooftop and Small kilowatt scale solar PV plants
 Institutional sector (hospitals and educational institutions etc.);

Industrial sector;
Commercial sector;
Housing sector;

The year-wise revised targets of rooftop-solar power plants proposed to be
achieved under the National Solar Mission to accomplish the scaled-up target
of 40,000MW is as under:
Categor
y
Year-wise target
(MW)
2015-
16
2016-
17
2017-
18
2018-
19
2019-
20
2020-
21
2021-
22 Total
Roof-top 200 4,800 5,000 6,000 7,000 8,000 9,000 40,000
Solar
The targeted capacity of rooftop-solar power plants proposed to be achieved
by Karnataka under the National Solar Mission is as under:
Categor
y
Year-wise target
(MW)
2015-
16
2016-
17
2017-
18
2018-
19
2019-
20
2020-
21
2021-
22 Total
Roof-top 10 275 290 344 403 460 518 2300
Solar
Further, the Government of Karnataka (GoK) has notified the Karnataka Solar
Policy 2014-2021 on 22
nd
May, 2014 which envisages achieving a minimum of
400 MW of grid connected solar rooftop plants and 1600 MW of grid connected
utility scale solar projects in the State by 2018.
Minimum program targets (MW):
Year 2014-15
2015-
16
2016-
17 2017-18
Roof-top (grid connected 100 100 100 100
and off-grid)
2
Discussion paper for determination of tariff for Rooftop and Small kilowatt scale solar PV plants
The Ministry of New and Renewable Energy (MNRE) in its guidelines dated
26
th
June, 2014 on grid connected Rooftop and small Solar Power Plants, has
focussed on capacity addition of solar power ranging from 1KWp to 500KWp
rooftop and small solar power plants. The guidelines suggest net metering
and tariff determination by regulators such that the tariffs are attractive to
investors and also do not put too much burden on ESCOMs. The MNRE
would provide incentives which includes 15% subsidy for selected
categories, accelerated depreciation benefits for industrial and commercial
buildings, bank loans at interest rate of housing loan from public sector
Banks, Customs Duty concessions and Excise Duty exemptions etc.
2. Need for Mid-course revision:
The Commission in its Order dated 10
th
October, 2013, has approved the
following tariff for rooftop solar PV plants:
Type of rooftop project Tariff (Rs./unit)
Rooftop project without subsidy 9.56
Rooftop project with 30% capital subsidy 7.20
The Commission has already made midcourse revision of the tariff of
megawatt scale solar PV and solar thermal plants. The revision was
prompted by consistent reduction in the capital cost which is one of the
main factors for determination of tariff. Reduction of capital cost is due to
reduction in the price of solar modules that forms the single most major
component of solar tariff. Tariff in respect of rooftop and small solar PV plants
also needs to similarly reflect their present capital cost. The Commission
therefore considers that there is a case for review of the tariff determined for
solar rooftop and small kilowatt scale solar PV power plants along with
review of the features of net metering approach adopted by the
Commission and also a relook of other issues of relevance as discussed in this
paper. Hence, this discussion paper is issued to elicit the views of all the
stakeholders before taking further decision in the matter.
3
Discussion paper for determination of tariff for Rooftop and Small kilowatt scale solar PV plants
3. Revision of Tariff for kilowatt scale Solar PV rooftop and small Solar power
plants:
The Commission proposes the following parameters for revision of tariff of
kilowatt scale rooftop and small Solar PV power plants:
i) Life of the Plant:
It is proposed to continue with the currently fixed life of plant which is 25
years for the purpose of determination of tariff.
ii) Term and Tariff design:
Since the life of the plant is being considered as 25 years, in order to ensure
certainty of revenue streams to the investors, the Commission proposes to
continue with current provision of levelized tariff for a period of 25 years as
discussed in the subsequent paras of this discussion paper.
iii) Capacity Utilisation factor:
The Commission in its Tariff Order dated 10
th
October, 2013 had considered
CUF of 19% for solar photovoltaic plants and it proposes to continue with the
same levels of CUF for kilowatt scale rooftop and small Solar PV power
plants.
iv) Capital Cost:
The Commission in its Tariff Order dated 10
th
October, 2013 had considered
capital cost of Rs.90,000 per KW for kilowatt scale rooftop and small Solar PV
power plants. MNRE in its website has indicated a benchmark capital cost of
Rs.80000 per KW rooftop solar plants.
The Solar Corporation of India (SECI) in its notification of successful of bidders
for allocation of rooftop PV projects under Part-A of Phase IV dated 23
rd
September, 2014 has allocated 2 MW of rooftop PV projects in Karnataka at
module price of Rs.67/Wp. Further, SECI in its notification of successful of
bidders for allocation of rooftop PV projects under Part-B of Phase IV dated
3
rd
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Discussion paper for determination of tariff for Rooftop and Small kilowatt scale solar PV plants
November, 2014 has allocated 2 MW of rooftop PV projects in Karnataka at
levelized tariff of Rs.5.97/kWh.
The Commission in its Order dated 30
th
July, 2015 has considered the solar
module cost at Rs.31.20 / Wp and total capital cost of Rs.600 lakhs / MW.
Excluding the land cost of Rs.25 lakhs / MW, the capital cost would be Rs.575
lakhs / MW. This works out to Rs.57, 500 / KW.
The Commission notes that though the cost of solar modules used in rooftop and
small solar plants would be on par with that used in megawatt scale plants, the
cost of power conditioning units and balance of system may not be
comparable with megawatt scale plants. Hence, the Commission is of the view
that capital cost of Rs.57,500 / KW is not feasible for such plants. The Commission
takes note of the recent phenomenon of several players entering into the field
of solar rooftop power generation and the competition therein, which is likely to
result in significant reduction in capital cost. The revised capital cost should take
into account the current cost and also the likely reduction in the days to come.
Considering the above available references of price bids for solar rooftop PV
and benchmark cost of MNRE, as discussed in the above paragraphs, the
Commission proposes to adopt a capital cost of Rs.75,000 /KW for tariff
determination.
v) Debt-Equity Ratio
The Commission proposes to consider a debt equity ratio of 70:30 as currently
fixed for the purpose of factoring loan and equity.
vi) Operation & Maintenance Cost:
The operation and maintenance cost consists of employee cost, administrative
and general expenses and Repairs & Maintenance expenses. The Commission in
its order dated 10
th
October, 2013 has considered O & M expenses of Rs.1500 /
KW (2% of the capital cost) with an annual escalation of 5.72%.
5
Discussion paper for determination of tariff for Rooftop and Small kilowatt scale solar PV plants
The Commission is of the view that it would be appropriate to consider a
percentage of the capital cost as O & M expenses duly providing annual
escalation to meet the inflationary costs.
vii) Interest and Tenure of Debt:
Considering the normative tenure of long term debts, the Commission proposes
to consider the tenure of debts as 12 years. The Commission in its Order dated
30
th
July, 2015 on megawatt scale solar PV plants has considered interest on
debt at 12.30%. The MNRE has advised Banks to include capital cost of solar
rooftop PV plant as part of the home loan. Many Banks have already initiated
action and as such loans are available at lower interest rates. The Commission
proposes to review the interest allowable on debt based on the prevailing
interest rates applicable for solar power projects.
viii) Working Capital:
The Commission in its present tariff order on megawatt scale PV plants has
considered two months receivables as working capital. The Commission
proposes to fix an appropriate working capital for smaller solar power projects
based on the suggestions / comments it receives.
ix) Interest on Working Capital:
The Commission in its recent Order on megawatt scale PV plants has considered
interest on working capital at 12.50%. Considering the prevailing base rates and
interest rates on short term loans, the Commission proposes to decide suitably,
the allowable interest on working capital.
x) Depreciation:
Since the Commission has proposed 70% of the capital cost to be financed by
debt component and the tenure of debt at 12 years, the Commission proposes
to adopt annual depreciation at 5.83% for the first 12 years to provide
6
Discussion paper for determination of tariff for Rooftop and Small kilowatt scale solar PV plants
adequate depreciation to meet the loan repayment and an annual
depreciation at 1.54% for the balance period of 13 years.
xi) Return on Equity:
The Commission in its present Tariff Order on megawatt scale PV plants has
allowed RoE of 16% and the actual tax component as a pass through. The
Commission proposes to continue with the same.
xii) Discount Rate:
Since the financing of capital cost is based on 70% debt and 30% equity, the
Commission is of the opinion that it would be appropriate to consider
weighted average cost of capital (WACC) as the discount factor.
Summary of the parameters adopted by KERC and some of the other States
for determination of tariff is indicated in Annexure.
4. Other issues of importance:
i) Sanctioned load Vs installed capacity of solar rooftop PV plant:
The Commission notes that many consumers are intending to install rooftop
and other small solar power plants far in excess of their sanctioned load. For
example, as per the data furnished by BESCOM vide its letter dated 1
st
August, 2015, an installation with 100 KW sanctioned load and consuming
only 637 units/month on an average, is proposing to install 500 KW
rooftop/small solar plant and would be exporting 59,363 units / month on net
metering basis. Similarly, a consumer with sanctioned load of 1 KW intends to
install SRTPV of 100 KW which would result in pumping large quantity of net
metered energy into the grid. This disparity between the sanctioned and the
installed capacity is resulting in disproportionately large surplus energy being
pumped into the grid under the net metering arrangement by consumers
installing rooftop solar power plants.
7
Discussion paper for determination of tariff for Rooftop and Small kilowatt scale solar PV
plants
The Commission is of the view that rooftop and small solar power plants are
intended to encourage utilising the energy at the point of generation.
Rooftop solar generation will also reduce transmission and distribution losses
besides savings on creation of transmission and distribution infrastructure.
The Commission is of the view that this trend of consumers installing solar
rooftop power plants of capacities far in excess of their sanctioned load
should not be encouraged as it is not in the larger interest of the distribution
licensees and also the general consumers. There is a need to fix a cap on
the generation capacity vis-a-vis the sanctioned load. Even in States where
net metering facility is extended to consumers installing rooftop / small solar
power plants, there is a cap on the generation capacity of such plants as
detailed below:
Name of State Reference
Allowable Installed Capacity
of
Solar Rooftop Plant
Tamilnadu Guidelines for Net-metering
No
t more than
issued by
TEDA Sanctioned/Contracted load
Telangana TSSPDCL Less than or equal to
Sanctioned/Contracted load
Maharashtra Draft
Net-
metering
No
t more than contract
regulations
2015 demand or connected load.
Rajasthan Net-metering Regulations Not more than 80% of the
issue
d
b
y Rajasthan ERC sanctioned connected load or
date
d contract demand.
Punjab Policy on net-metering for Not more than 80% of the
grid interactive Roof-top
Solar sanctioned connected load or
Phot
o
Voltai
c
Pow
er
Plant
s contract demand.
date
d
05.11.2014
issued by
Government of
Punjab
Haryana
HER
C
Rooft
op solar
gri
d
No
t more than
interactiv
e
system
based on Sanctioned/Contracted load
net-metering Regulations
2014 dated
25.11.2014
Gujarat Gujarat Solar Policy-2015 Upto a maximum of 50% of the
dated 13.08.2015 Consumer’s sanctioned load
It could be seen from the above table, the allowable installed capacity is
not more than the Sanctioned/Contract load in all the above States. Hence,
keeping in view the issues of grid stability and the financial health of
distribution licensees, the Commission proposes to limit the allowable
capacity of SRTPV
8
Discussion paper for determination of tariff for Rooftop and Small kilowatt scale solar PV plants
and small solar PV plants to the sanctioned load as indicated in the subsequent
paras of this paper.
ii) Small Solar Plants mounted on Ground:
The Commission in its Order dated 10
th
October, 2013 had determined tariff for
kilowatt scale small Solar PV plants and Rooftop solar PV plants. The Commission
had decided that for solar PV plants of installed capacity of beyond 1MW, the
tariff as determined for megawatt scale plants will be applicable. Doubts have
been expressed as to whether tariff determined and net metering facility
extended to rooftop solar PV plants is also available to small solar PV plants
mounted on ground. The MNRE guidelines issued on 26
th
June, 2014 identifies
rooftop and small scale solar power plants with maximum capacity of 500KWp
and a minimum of 1KWp.
The Commission is of the view that solar power generation in a consumer’s
premises needs to be encouraged irrespective of whether it is on rooftop or
ground mounted. The Commission therefore proposes to allow rooftop and
small ground mounted solar power plants with installed capacities ranging from
1KW to maximum of 500 KW in a premises based on net-metering concept. In
case the installed capacity of a solar plant exceeds 500KW, then the tariff
determined for the megawatt scale will be applicable to such plants.
iii) Net-metering & Gross metering:
The Commission in its Order dated 10
th
October, 2013 had allowed power
purchase by the distribution licensees from rooftop solar plants including small
solar power plants by introducing the concept of net metering
arrangement/scheme. In net metering the consumer is paid for the net energy
i.e., the difference of energy generated from solar rooftop plant and energy
consumed in his/her installation. This concept allows only surplus energy to be
injected into the grid by the consumer. The Commission proposes to continue
with net-metering concept for all consumers other than domestic consumers.
9
Discussion paper for determination of tariff for Rooftop and Small kilowatt scale solar PV plants
In case of domestic consumers, the Commission proposes to adopt gross
metering concept wherein the entire energy generated by the solar rooftop
plant including small solar power plants is allowed to be injected into the grid
without reckoning the consumption by the domestic consumer’s installation. This
would allow sale of entire energy generated at the tariff to be fixed by the
Commission.
iv) Grid Connectivity:
The Commission in its Order dated 10
th
October, 2013 had decided that, the
evacuation from 1 kW upto 5 kW installed capacity of solar rooftop PV shall be
at single phase 230 volts, the evacuation from 5 kW upto 50 kW installed
capacity shall be at 3 phase 415 volts level. Further, it was decided that the
solar rooftop PV systems with installed capacity of 50 kW and above shall be
connected at 11 kV distribution systems. The maximum installed capacity of
solar rooftop PV plant at any single location was limited upto 1 MW, for the
purpose of applying the solar rooftop PV tariff.
The grid connectivity shall have to be arranged by the distribution licensee in
accordance with the prevailing CEA (Technical Standards for Connectivity to
the Grid) Regulations, 2007 and CEA (Technical Standards for Connectivity to
the Grid) Amendment Regulations, 2013 and KERC Grid Code as amended
from time to time.
The Commission proposes to adopt following grid connectivity in compliance
with the above said Regulations / Code:
Installed Capacity of solar installation Voltage Level
From 1 KWp and upto 5 KWp 240 volts
Above 5 KWp and upto 50 KWp 415 volts
Above 50 KWp and upto 500 KWp 11 KV HT / 415 volts LT
10
Discussion paper for determination of tariff for Rooftop and Small kilowatt scale solar PV plants
v) Metering:
As per the current Order in force, metering shall be in compliance with the
CEA (Installation and Operation of Meters) Regulations 2006 as amended
from time to time.
In the case of solar rooftop PV systems including small solar power plants
connected to LT grid of a distribution company, the concept of gross or
net metering will be adopted and the energy pumped into the grid will be
billed accordingly. However, if site specific issues are observed by
ESCOMs, the ESCOMs should adopt such metering arrangement wherein
the solar injection and consumer’s self-consumption are metered
separately and gross or net metered component is computed and billed
as per the Commission’s Orders in force.
5. Tariff for the Small Kilowatt scale and Rooftop Solar PV Plants:
The Commission had considered fixing a separate feed-in-tariff for rooftop
and small solar power plants and extending net metering facility for
measuring the surplus energy injected to distribution licensee’s grid, in order
to harness the large potential for generating power using solar energy with
plants being installed on un-utilised rooftops and vacant lands around
buildings by grid connected consumers. This was to facilitate the
consumers to get their return on their investments in a shorter period and
encourage more consumers to invest in such solar power plants, which
would be in the larger interest of the State. The surplus generation capacity
was envisaged to be within reasonable limits.
The tariff of solar power is declining year on year. This is mainly due to
reduction in module price, market competition and economies of scale
over a period of time. In the recent reverse bidding held in Madhya
Pradesh, developers have offered to install solar rooftop PV plants and
supply power generated at a rate of Rs.5.00 per unit. The latest tariffs
discovered on 4
th
November, 2015 in the
11
Discussion paper for determination of tariff for Rooftop and Small kilowatt scale solar PV
plants
NTPC Tender for setting up of 500MW Solar plant in Andhra Pradesh is as
low as Rs.4.63 per unit. This indicates that the cost of generation from solar
power plants is on the decline. The tariff allowed in other States on net
metering basis is indicated in the Annexure for reference.
The Commission proposes to determine tariff duly considering all
components of expenditure like capital cost, interest on loan,
depreciation, interest on working capital and return on equity which have
been discussed in the above paragraphs.
6. Implementation of scheme of SRTPV Plants:
Based on the above discussions, considering the present retail tariff for
different categories of consumers in the State, the Commission proposes
the following approach for implementation of the scheme of SRTPV and
small Solar Plants:
Category of Consumers Allowable Installed Billing
Capacity of rooftop and
small solar PV plants
NET-METERING
(Applicable to Industrial, Commercial and all categories of consumers
other than Domestic category)
HT Consumers
Equivale
nt to
Contrac
t 50%
o
f energy
(other than Residential)
Demand/Sanctione
d
generate
d
has
to
b
e
Loa
d subject
t
o a
consume
d by
th
e
maximu
m
of
500KW (HT
consumer. Balance
50%
Pow
er supply beyond energy is to be billed at
50K
W).
tariff determined by
the
Commissio
n.
LT Consumers Equivalent to Sanctioned
(other than Domestic)
Loa
d subject
t
o a In case the self-
maximu
m of
5K
W on
consumption is less
than
singl
e
phase
supply
an
d 50%, such
shortf
all in
for above 5KW upto
50KW
ener
gy consumption
on three phase supply. shall be billed at
Average Pooled Power
Purchase cost notified
by the Commission
from
time to
time.
12
Discussion paper for determination of tariff for Rooftop and Small kilowatt scale solar PV plants
In case of installed
capacity in excess of
allowable capacity, the
energy injected in
excess of the allowable
installed capacity shall
be billed at Average
Pooled Power Purchase
cost notified by the
Commission from time
to time.
GROSS METERING (Applicable
to only Domestic Consumers)
HT Residential
Consumers
Gross energy
generated
(HT-
4):
b
y
th
e
Sol
ar Rooftop
Equivale
nt
t
o
Contrac
t plant will be allowed to
Demand/Sanction
ed
be injected into the
grid
Domestic Consumers
Loa
d
subjec
t
t
o a payable at the tariff to
maximu
m
o
f
500K
W (HT
b
e
fixe
d by the
Pow
er supply beyond
Commissio
n
bas
ed on
50K
W).
th
e
parameter
s
discussed in this paper.
L
T
Domesti
c Consumers
Th
e Consumer
sha
ll
(LT2(a)):
continu
e
t
o
p
a
y his
Equivalent to
Sanctioned energy
b
ill
s
fo
r the
Loa
d
subjec
t
t
o a
energy consumed at
the
maximu
m
o
f
5K
W on
prevaili
ng
applicabl
e
singl
e
pha
se
suppl
y
an
d retail supply tariff.
f
o
r above
5K
W upto
50K
W
o
n
thre
e
phas
e
supply. In
ca
se
o
f installed
capaci
ty
i
n excess of
allowable capacity, the
energy
injecte
d in
excess of the allowable
installe
d
capacit
y
sha
ll
b
e
billed
at Average
Pooled Power
Purchase
c
os
t
notifie
d
b
y the
Commission from time
to
time.
13
Discussion paper for determination of tariff for Rooftop and Small kilowatt scale solar PV plants
7. Applicability of the revised tariff:
The revised tariff to be determined is proposed to be made applicable to all
the new rooftop solar and small solar PV plants of stipulated capacity
entering into power purchase agreement from 1
st
January, 2016 onwards
and on or before 31
st
March, 2018.
8. Suggestions/Comments/Views:
As per the above discussions, the Commission proposes to determine tariff
for rooftop and kilowatt scale small solar power plants.
The Commission requests all stakeholders and the general public to furnish
their views/suggestions/comments before 16
th
December, 2015. The
stakeholders are requested to furnish any documents or material as may be
available in support of their proposals / views so as to enable determination
of tariff in a reasonable manner.
*******
1
4
Discussion paper for determination of tariff for Rooftop and Small kilowatt scale solar PV plants
Annexure
Summary of tariff parameters considered in some of the other SERCs in
comparison with KERC
State Haryana Gujarat KERC
Date of issue
13.08.201
4 17.08.2015 10.10.2013
A
s
proposed
in
th
is
discussi
on
paper
Draft/Final
Final
Order Final Order Final Order Draft Oder
Applicability
Plant
s to
b
e Plants
t
o
b
e
Plants
to
b
e
Plants to
be
commissione
d
commissioned
during
commission
ed
commissio
ned
between FY
2014-
1
st
July, 2015 to
31
st
d
betwee
n
durin
g
15 and FY 2015-16
March,
2018
F
Y
1
4
an
d 1st
F
Y
1
8
January,20
1
6 and
upto
3
1
s
t
Marc
h,
F
Y
1
8
Capital cost Rs.6.80 Crores/MW
R
s. 80,000/kW
Rs.
90,000/kW
Rs
.
75000/
kW
CUF 19%
1
9
%
1
9
%
1
9
%
Operation
and
Rs.1124 /kW with
an
R
s,
1090/k
W
wi
th
a
n
2% of
Capital Rs.1500 /
maintenance
ann
ual escalation escalation of 5.72%
c
o
st
i.e
.,
K
W
(2
%
o
f
expenses of 5.72% Rs.1800/kW
th
e
capit
al
w
it
h an cost) with
annual
a
n
annu
al
escalation
of escalation
5.72% of
5.72%
Life of plant 25 years
25
years
25
years
25
years
and
machinery
Term of Loan 10 years
10
years
10
years
12
years
Interest on
13.7
5%
12.70
% 12.50% 12.30%
loan
Working
a)O
&M for
on
e
a)O&
M
expens
e
f
o
r 2 months 2
mont
hs
Capital
mon
th;
o
n
e
month
; receivables
receivable
s
components (b)
Receivabl
es
(
b
)
On
e month
equivale
nt
t
o 2
energ
y charge
a
t
mon
ths
o
f
energ
y normative CUF;
charges for sale of
electricit
y
calculat
ed
o
n
th
e
normativ
e CUF;
(c) Maintenance
spar
e @
1
5
% of
operatio
n
an
d
maintenanc
e
expense
s.
ce
15
Discussion paper for determination of tariff for Rooftop and Small kilowatt scale solar PV plants
Interest on
14.00
% 11.85% 13%
12.50
%
working
capital
Return on
16
%
o
n
normativ
e 14% 16% 16%
equity equity
(M
AT /
Corporat
e
Ta
x
shal
l be
separately
allowed
in the tariff)
Debt-equity 70 : 30 70:30 70:30 70:30
ratio
Depreciation 7% for first 10 years 6% for first 10 years
Depreciatio
n
Depreciati
on
rate up to maximum of then 2% for the next
rate
for
th
e
ra
te
fo
r
90
% 15 years first 10
t
h
e
f
i
r
s
t
1
2
years=
7%
years=5.83
%
and the
next and
th
e
15 next
1
3
years=1.33%
years=1.54
%
Discount
14.42
% 10.647% 13.41%
WAC
C
factor
Tariff
7.19/k
Wh
Rs.8.42/Unit during
1
st
9.56/k
Wh
T
o
b
e
(Without July,2015
t
o
31
st withou
t
determine
d
Accelerated
March,
2016 subsidy
Depreciation)
Rs.7.83/Unit during
1
st
7.20/k
Wh
April, 2016 to 31
st
with subsidy
March,
2017
Rs.7.28/Unit during
1
st
April,2017
t
o
31
st
March,
2018
16
Discussion paper for determination of tariff for Rooftop and Small kilowatt scale solar PV plants
The tariff allowed in other States on net metering basis for SRTPV
Name of State
Referen
ce Allowable tariff for Solar
Rooftop Plant
Tamil Nadu TEDA
Guideline
s
fo
r
Injection upto 90% of
the
implementation
o
f LT
consumpti
on
annuall
y
connectivity/Ne
t-
wil
l
b
e
adjuste
d at
Metering
applicable retail
supply
tariff. Excess beyond
90%
will go as lapsed.
Andhra Pradesh
Andh
ra
Prades
h Solar Net-metering OR Gross
Power Policy-2015
dated
meteri
ng
allowe
d at
12.02.2015
ta
riff
equ
al
t
o the
averag
e cost to serve
determine
d
b
y APERC
every year. For FY14, it is
Rs.5.25/Unit
.
Telangana
Telangana
Solar Policy Net-metering OR Gross
2015
meteri
ng
i
s
allowe
d.
Under gross metering
the
power would be sold at
average cost of service
of the DISCOM. The
tariff
applicable for
unit
s
under
n
et metering
would be at
averag
e
pooled power purchase
cost.
Maharashtra Net-metering
Net energy at the end
of
Regulations
2015
each Financial year
shall
b
e
purchase
d
b
y the
DISCO
M
a
t approved
Average Cost of Power
Purchase for that year.
17
Discussion paper for determination of tariff for Rooftop and Small kilowatt scale solar PV plants
Rajasthan Net-metering Excess energy of 50units
Regulatio
ns
issue
d by or more in month is paid
Rajastha
n
ER
C dated at
RER
C
determine
d
26.02.2015 & RERC Solar tariff. In case it is less
Tariff Order dated than 50 units in a month,
19.06.201
5.
th
e
sam
e
i
s carried
forwar
d
t
i
l
l
th
e
cumulati
ve excess
reach
es 50
Units
.
A
t
prese
nt RERC
ta
riff is
Rs.6.74/Unit
.
Punjab
Polic
y
o
n
net-
metering
Injection upto 90% of
the
for grid interactive Roof-
consumpti
on
annuall
y
top Solar
Photo
Voltai
c
wi
ll
b
e
adjuste
d at
Pow
er Plants dated
applicab
le retail supply
05.11.201
4 issued by
tariff. Excess beyond
90%
Government of Punjab will go as lapsed.
Haryana HERC Rooftop solar grid
Injection upto 90% of
the
interactive system
based
consumpti
on
annuall
y
on
net-
metering
wi
ll
b
e
adjuste
d at
Regulatio
ns
201
4 dated
applicab
le retail supply
25.11.201
4
tariff. Excess beyond
90%
will go as lapsed.
Delhi
DERC Guidelines on
Net-
Excess generation is
paid
metering Regulations- at
Averag
e Pooled
2014 Power Purchase Cost to
be settled at the end of
the
year
Gujarat
Gujarat Solar Policy-
2015
Surplu
s
ener
gy
wi
ll
b
e
dated
13.08.2015 paid at Average Pooled
Power Purchase rate of
the year in which the
plant is commissioned.
18

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Discussion paper 16.11.2015

  • 1. Discussion paper for determination of tariff for Rooftop and Small kilowatt scale solar PV plants KARNATAKA ELECTRICITY REGULATORY COMMISSION Date: 16 th November, 2015 “Discussion paper for determination of tariff for Grid-Interactive Rooftop and Small kilowatt scale solar photovoltaic plants in Karnataka’’ 1. Preamble: The Karnataka Electricity Regulatory Commission had issued an Order dated 10 th October, 2013 on “Determination of Tariff for grid connected solar photovoltaic, solar thermal and rooftop solar photovoltaic and other small solar power plants”. The tariff determined in this Order is valid for projects entering into Power Purchase Agreement (PPA) on or after 1 st April, 2013 and upto 31 st March, 2018 but excluding those projects for which the tariff is discovered through bidding process. Further, the Commission in its Order dated 30 th July, 2015, has revised the tariff for grid connected megawatt scale solar photovoltaic and solar thermal power plants duly factoring the decline in capital cost. This has resulted in reduction in tariff from Rs.8.40/unit to Rs.6.51/unit for solar PV plants and from Rs.10.92/unit to Rs. 10.85/unit in respect of solar thermal plants effective from 1 st September, 2015. The Government of India (GoI), vide Resolution dated 1 st July, 2015, has revised the National Solar Mission targets from 20,000 MW to 1, 00,000 MW to be achieved by the year 2021-22. This targeted capacity is proposed to be achieved through deployment of 40,000 MW of Rooftop solar projects and 60,000 MW of large and medium-scale solar projects. This proposed capacity addition of rooftop solar power is envisaged under the following categories: 1
  • 2. Discussion paper for determination of tariff for Rooftop and Small kilowatt scale solar PV plants  Institutional sector (hospitals and educational institutions etc.);  Industrial sector; Commercial sector; Housing sector;  The year-wise revised targets of rooftop-solar power plants proposed to be achieved under the National Solar Mission to accomplish the scaled-up target of 40,000MW is as under: Categor y Year-wise target (MW) 2015- 16 2016- 17 2017- 18 2018- 19 2019- 20 2020- 21 2021- 22 Total Roof-top 200 4,800 5,000 6,000 7,000 8,000 9,000 40,000 Solar The targeted capacity of rooftop-solar power plants proposed to be achieved by Karnataka under the National Solar Mission is as under: Categor y Year-wise target (MW) 2015- 16 2016- 17 2017- 18 2018- 19 2019- 20 2020- 21 2021- 22 Total Roof-top 10 275 290 344 403 460 518 2300 Solar Further, the Government of Karnataka (GoK) has notified the Karnataka Solar Policy 2014-2021 on 22 nd May, 2014 which envisages achieving a minimum of 400 MW of grid connected solar rooftop plants and 1600 MW of grid connected utility scale solar projects in the State by 2018. Minimum program targets (MW): Year 2014-15 2015- 16 2016- 17 2017-18 Roof-top (grid connected 100 100 100 100 and off-grid)
  • 3. 2
  • 4. Discussion paper for determination of tariff for Rooftop and Small kilowatt scale solar PV plants The Ministry of New and Renewable Energy (MNRE) in its guidelines dated 26 th June, 2014 on grid connected Rooftop and small Solar Power Plants, has focussed on capacity addition of solar power ranging from 1KWp to 500KWp rooftop and small solar power plants. The guidelines suggest net metering and tariff determination by regulators such that the tariffs are attractive to investors and also do not put too much burden on ESCOMs. The MNRE would provide incentives which includes 15% subsidy for selected categories, accelerated depreciation benefits for industrial and commercial buildings, bank loans at interest rate of housing loan from public sector Banks, Customs Duty concessions and Excise Duty exemptions etc. 2. Need for Mid-course revision: The Commission in its Order dated 10 th October, 2013, has approved the following tariff for rooftop solar PV plants: Type of rooftop project Tariff (Rs./unit) Rooftop project without subsidy 9.56 Rooftop project with 30% capital subsidy 7.20 The Commission has already made midcourse revision of the tariff of megawatt scale solar PV and solar thermal plants. The revision was prompted by consistent reduction in the capital cost which is one of the main factors for determination of tariff. Reduction of capital cost is due to reduction in the price of solar modules that forms the single most major component of solar tariff. Tariff in respect of rooftop and small solar PV plants also needs to similarly reflect their present capital cost. The Commission therefore considers that there is a case for review of the tariff determined for solar rooftop and small kilowatt scale solar PV power plants along with review of the features of net metering approach adopted by the Commission and also a relook of other issues of relevance as discussed in this paper. Hence, this discussion paper is issued to elicit the views of all the stakeholders before taking further decision in the matter.
  • 5. 3
  • 6. Discussion paper for determination of tariff for Rooftop and Small kilowatt scale solar PV plants 3. Revision of Tariff for kilowatt scale Solar PV rooftop and small Solar power plants: The Commission proposes the following parameters for revision of tariff of kilowatt scale rooftop and small Solar PV power plants: i) Life of the Plant: It is proposed to continue with the currently fixed life of plant which is 25 years for the purpose of determination of tariff. ii) Term and Tariff design: Since the life of the plant is being considered as 25 years, in order to ensure certainty of revenue streams to the investors, the Commission proposes to continue with current provision of levelized tariff for a period of 25 years as discussed in the subsequent paras of this discussion paper. iii) Capacity Utilisation factor: The Commission in its Tariff Order dated 10 th October, 2013 had considered CUF of 19% for solar photovoltaic plants and it proposes to continue with the same levels of CUF for kilowatt scale rooftop and small Solar PV power plants. iv) Capital Cost: The Commission in its Tariff Order dated 10 th October, 2013 had considered capital cost of Rs.90,000 per KW for kilowatt scale rooftop and small Solar PV power plants. MNRE in its website has indicated a benchmark capital cost of Rs.80000 per KW rooftop solar plants. The Solar Corporation of India (SECI) in its notification of successful of bidders for allocation of rooftop PV projects under Part-A of Phase IV dated 23 rd September, 2014 has allocated 2 MW of rooftop PV projects in Karnataka at module price of Rs.67/Wp. Further, SECI in its notification of successful of bidders for allocation of rooftop PV projects under Part-B of Phase IV dated
  • 8. Discussion paper for determination of tariff for Rooftop and Small kilowatt scale solar PV plants November, 2014 has allocated 2 MW of rooftop PV projects in Karnataka at levelized tariff of Rs.5.97/kWh. The Commission in its Order dated 30 th July, 2015 has considered the solar module cost at Rs.31.20 / Wp and total capital cost of Rs.600 lakhs / MW. Excluding the land cost of Rs.25 lakhs / MW, the capital cost would be Rs.575 lakhs / MW. This works out to Rs.57, 500 / KW. The Commission notes that though the cost of solar modules used in rooftop and small solar plants would be on par with that used in megawatt scale plants, the cost of power conditioning units and balance of system may not be comparable with megawatt scale plants. Hence, the Commission is of the view that capital cost of Rs.57,500 / KW is not feasible for such plants. The Commission takes note of the recent phenomenon of several players entering into the field of solar rooftop power generation and the competition therein, which is likely to result in significant reduction in capital cost. The revised capital cost should take into account the current cost and also the likely reduction in the days to come. Considering the above available references of price bids for solar rooftop PV and benchmark cost of MNRE, as discussed in the above paragraphs, the Commission proposes to adopt a capital cost of Rs.75,000 /KW for tariff determination. v) Debt-Equity Ratio The Commission proposes to consider a debt equity ratio of 70:30 as currently fixed for the purpose of factoring loan and equity. vi) Operation & Maintenance Cost: The operation and maintenance cost consists of employee cost, administrative and general expenses and Repairs & Maintenance expenses. The Commission in its order dated 10 th October, 2013 has considered O & M expenses of Rs.1500 / KW (2% of the capital cost) with an annual escalation of 5.72%. 5
  • 9. Discussion paper for determination of tariff for Rooftop and Small kilowatt scale solar PV plants The Commission is of the view that it would be appropriate to consider a percentage of the capital cost as O & M expenses duly providing annual escalation to meet the inflationary costs. vii) Interest and Tenure of Debt: Considering the normative tenure of long term debts, the Commission proposes to consider the tenure of debts as 12 years. The Commission in its Order dated 30 th July, 2015 on megawatt scale solar PV plants has considered interest on debt at 12.30%. The MNRE has advised Banks to include capital cost of solar rooftop PV plant as part of the home loan. Many Banks have already initiated action and as such loans are available at lower interest rates. The Commission proposes to review the interest allowable on debt based on the prevailing interest rates applicable for solar power projects. viii) Working Capital: The Commission in its present tariff order on megawatt scale PV plants has considered two months receivables as working capital. The Commission proposes to fix an appropriate working capital for smaller solar power projects based on the suggestions / comments it receives. ix) Interest on Working Capital: The Commission in its recent Order on megawatt scale PV plants has considered interest on working capital at 12.50%. Considering the prevailing base rates and interest rates on short term loans, the Commission proposes to decide suitably, the allowable interest on working capital. x) Depreciation: Since the Commission has proposed 70% of the capital cost to be financed by debt component and the tenure of debt at 12 years, the Commission proposes to adopt annual depreciation at 5.83% for the first 12 years to provide 6
  • 10. Discussion paper for determination of tariff for Rooftop and Small kilowatt scale solar PV plants adequate depreciation to meet the loan repayment and an annual depreciation at 1.54% for the balance period of 13 years. xi) Return on Equity: The Commission in its present Tariff Order on megawatt scale PV plants has allowed RoE of 16% and the actual tax component as a pass through. The Commission proposes to continue with the same. xii) Discount Rate: Since the financing of capital cost is based on 70% debt and 30% equity, the Commission is of the opinion that it would be appropriate to consider weighted average cost of capital (WACC) as the discount factor. Summary of the parameters adopted by KERC and some of the other States for determination of tariff is indicated in Annexure. 4. Other issues of importance: i) Sanctioned load Vs installed capacity of solar rooftop PV plant: The Commission notes that many consumers are intending to install rooftop and other small solar power plants far in excess of their sanctioned load. For example, as per the data furnished by BESCOM vide its letter dated 1 st August, 2015, an installation with 100 KW sanctioned load and consuming only 637 units/month on an average, is proposing to install 500 KW rooftop/small solar plant and would be exporting 59,363 units / month on net metering basis. Similarly, a consumer with sanctioned load of 1 KW intends to install SRTPV of 100 KW which would result in pumping large quantity of net metered energy into the grid. This disparity between the sanctioned and the installed capacity is resulting in disproportionately large surplus energy being pumped into the grid under the net metering arrangement by consumers installing rooftop solar power plants. 7
  • 11. Discussion paper for determination of tariff for Rooftop and Small kilowatt scale solar PV plants The Commission is of the view that rooftop and small solar power plants are intended to encourage utilising the energy at the point of generation. Rooftop solar generation will also reduce transmission and distribution losses besides savings on creation of transmission and distribution infrastructure. The Commission is of the view that this trend of consumers installing solar rooftop power plants of capacities far in excess of their sanctioned load should not be encouraged as it is not in the larger interest of the distribution licensees and also the general consumers. There is a need to fix a cap on the generation capacity vis-a-vis the sanctioned load. Even in States where net metering facility is extended to consumers installing rooftop / small solar power plants, there is a cap on the generation capacity of such plants as detailed below: Name of State Reference Allowable Installed Capacity of Solar Rooftop Plant Tamilnadu Guidelines for Net-metering No t more than issued by TEDA Sanctioned/Contracted load Telangana TSSPDCL Less than or equal to Sanctioned/Contracted load Maharashtra Draft Net- metering No t more than contract regulations 2015 demand or connected load. Rajasthan Net-metering Regulations Not more than 80% of the issue d b y Rajasthan ERC sanctioned connected load or date d contract demand. Punjab Policy on net-metering for Not more than 80% of the grid interactive Roof-top Solar sanctioned connected load or Phot o Voltai c Pow er Plant s contract demand. date d 05.11.2014 issued by Government of Punjab Haryana HER C Rooft op solar gri d No t more than interactiv e system based on Sanctioned/Contracted load
  • 12. net-metering Regulations 2014 dated 25.11.2014 Gujarat Gujarat Solar Policy-2015 Upto a maximum of 50% of the dated 13.08.2015 Consumer’s sanctioned load It could be seen from the above table, the allowable installed capacity is not more than the Sanctioned/Contract load in all the above States. Hence, keeping in view the issues of grid stability and the financial health of distribution licensees, the Commission proposes to limit the allowable capacity of SRTPV 8
  • 13. Discussion paper for determination of tariff for Rooftop and Small kilowatt scale solar PV plants and small solar PV plants to the sanctioned load as indicated in the subsequent paras of this paper. ii) Small Solar Plants mounted on Ground: The Commission in its Order dated 10 th October, 2013 had determined tariff for kilowatt scale small Solar PV plants and Rooftop solar PV plants. The Commission had decided that for solar PV plants of installed capacity of beyond 1MW, the tariff as determined for megawatt scale plants will be applicable. Doubts have been expressed as to whether tariff determined and net metering facility extended to rooftop solar PV plants is also available to small solar PV plants mounted on ground. The MNRE guidelines issued on 26 th June, 2014 identifies rooftop and small scale solar power plants with maximum capacity of 500KWp and a minimum of 1KWp. The Commission is of the view that solar power generation in a consumer’s premises needs to be encouraged irrespective of whether it is on rooftop or ground mounted. The Commission therefore proposes to allow rooftop and small ground mounted solar power plants with installed capacities ranging from 1KW to maximum of 500 KW in a premises based on net-metering concept. In case the installed capacity of a solar plant exceeds 500KW, then the tariff determined for the megawatt scale will be applicable to such plants. iii) Net-metering & Gross metering: The Commission in its Order dated 10 th October, 2013 had allowed power purchase by the distribution licensees from rooftop solar plants including small solar power plants by introducing the concept of net metering arrangement/scheme. In net metering the consumer is paid for the net energy i.e., the difference of energy generated from solar rooftop plant and energy consumed in his/her installation. This concept allows only surplus energy to be injected into the grid by the consumer. The Commission proposes to continue with net-metering concept for all consumers other than domestic consumers. 9
  • 14. Discussion paper for determination of tariff for Rooftop and Small kilowatt scale solar PV plants In case of domestic consumers, the Commission proposes to adopt gross metering concept wherein the entire energy generated by the solar rooftop plant including small solar power plants is allowed to be injected into the grid without reckoning the consumption by the domestic consumer’s installation. This would allow sale of entire energy generated at the tariff to be fixed by the Commission. iv) Grid Connectivity: The Commission in its Order dated 10 th October, 2013 had decided that, the evacuation from 1 kW upto 5 kW installed capacity of solar rooftop PV shall be at single phase 230 volts, the evacuation from 5 kW upto 50 kW installed capacity shall be at 3 phase 415 volts level. Further, it was decided that the solar rooftop PV systems with installed capacity of 50 kW and above shall be connected at 11 kV distribution systems. The maximum installed capacity of solar rooftop PV plant at any single location was limited upto 1 MW, for the purpose of applying the solar rooftop PV tariff. The grid connectivity shall have to be arranged by the distribution licensee in accordance with the prevailing CEA (Technical Standards for Connectivity to the Grid) Regulations, 2007 and CEA (Technical Standards for Connectivity to the Grid) Amendment Regulations, 2013 and KERC Grid Code as amended from time to time. The Commission proposes to adopt following grid connectivity in compliance with the above said Regulations / Code: Installed Capacity of solar installation Voltage Level From 1 KWp and upto 5 KWp 240 volts Above 5 KWp and upto 50 KWp 415 volts Above 50 KWp and upto 500 KWp 11 KV HT / 415 volts LT 10
  • 15. Discussion paper for determination of tariff for Rooftop and Small kilowatt scale solar PV plants v) Metering: As per the current Order in force, metering shall be in compliance with the CEA (Installation and Operation of Meters) Regulations 2006 as amended from time to time. In the case of solar rooftop PV systems including small solar power plants connected to LT grid of a distribution company, the concept of gross or net metering will be adopted and the energy pumped into the grid will be billed accordingly. However, if site specific issues are observed by ESCOMs, the ESCOMs should adopt such metering arrangement wherein the solar injection and consumer’s self-consumption are metered separately and gross or net metered component is computed and billed as per the Commission’s Orders in force. 5. Tariff for the Small Kilowatt scale and Rooftop Solar PV Plants: The Commission had considered fixing a separate feed-in-tariff for rooftop and small solar power plants and extending net metering facility for measuring the surplus energy injected to distribution licensee’s grid, in order to harness the large potential for generating power using solar energy with plants being installed on un-utilised rooftops and vacant lands around buildings by grid connected consumers. This was to facilitate the consumers to get their return on their investments in a shorter period and encourage more consumers to invest in such solar power plants, which would be in the larger interest of the State. The surplus generation capacity was envisaged to be within reasonable limits. The tariff of solar power is declining year on year. This is mainly due to reduction in module price, market competition and economies of scale over a period of time. In the recent reverse bidding held in Madhya Pradesh, developers have offered to install solar rooftop PV plants and supply power generated at a rate of Rs.5.00 per unit. The latest tariffs discovered on 4 th November, 2015 in the
  • 16. 11
  • 17. Discussion paper for determination of tariff for Rooftop and Small kilowatt scale solar PV plants NTPC Tender for setting up of 500MW Solar plant in Andhra Pradesh is as low as Rs.4.63 per unit. This indicates that the cost of generation from solar power plants is on the decline. The tariff allowed in other States on net metering basis is indicated in the Annexure for reference. The Commission proposes to determine tariff duly considering all components of expenditure like capital cost, interest on loan, depreciation, interest on working capital and return on equity which have been discussed in the above paragraphs. 6. Implementation of scheme of SRTPV Plants: Based on the above discussions, considering the present retail tariff for different categories of consumers in the State, the Commission proposes the following approach for implementation of the scheme of SRTPV and small Solar Plants: Category of Consumers Allowable Installed Billing Capacity of rooftop and small solar PV plants NET-METERING (Applicable to Industrial, Commercial and all categories of consumers other than Domestic category) HT Consumers Equivale nt to Contrac t 50% o f energy (other than Residential) Demand/Sanctione d generate d has to b e Loa d subject t o a consume d by th e maximu m of 500KW (HT consumer. Balance 50% Pow er supply beyond energy is to be billed at 50K W). tariff determined by the Commissio n. LT Consumers Equivalent to Sanctioned (other than Domestic) Loa d subject t o a In case the self- maximu m of 5K W on consumption is less than
  • 18. singl e phase supply an d 50%, such shortf all in for above 5KW upto 50KW ener gy consumption on three phase supply. shall be billed at Average Pooled Power Purchase cost notified by the Commission from time to time. 12
  • 19. Discussion paper for determination of tariff for Rooftop and Small kilowatt scale solar PV plants In case of installed capacity in excess of allowable capacity, the energy injected in excess of the allowable installed capacity shall
  • 20. be billed at Average Pooled Power Purchase cost notified by the Commission from time to time. GROSS METERING (Applicable to only Domestic Consumers) HT Residential Consumers Gross energy generated (HT- 4): b y th e Sol ar Rooftop Equivale nt t o Contrac t plant will be allowed to Demand/Sanction ed be injected into the grid Domestic Consumers Loa d subjec t t o a payable at the tariff to maximu m o f 500K W (HT b e fixe d by the Pow er supply beyond Commissio n bas ed on 50K W). th e parameter s discussed in this paper. L T Domesti c Consumers Th e Consumer sha ll (LT2(a)): continu e t o p a y his Equivalent to Sanctioned energy b ill s fo r the Loa d subjec t t o a energy consumed at the maximu m o f 5K W on prevaili ng applicabl e singl e pha se suppl y an d retail supply tariff. f o r above 5K W upto 50K W o n thre e phas e supply. In ca se o f installed capaci ty i n excess of allowable capacity, the energy injecte d in excess of the allowable installe d capacit y sha ll b e billed at Average
  • 22. Discussion paper for determination of tariff for Rooftop and Small kilowatt scale solar PV plants 7. Applicability of the revised tariff: The revised tariff to be determined is proposed to be made applicable to all the new rooftop solar and small solar PV plants of stipulated capacity entering into power purchase agreement from 1 st January, 2016 onwards and on or before 31 st March, 2018. 8. Suggestions/Comments/Views: As per the above discussions, the Commission proposes to determine tariff for rooftop and kilowatt scale small solar power plants. The Commission requests all stakeholders and the general public to furnish their views/suggestions/comments before 16 th December, 2015. The stakeholders are requested to furnish any documents or material as may be available in support of their proposals / views so as to enable determination of tariff in a reasonable manner. ******* 1
  • 23. 4
  • 24. Discussion paper for determination of tariff for Rooftop and Small kilowatt scale solar PV plants Annexure Summary of tariff parameters considered in some of the other SERCs in comparison with KERC State Haryana Gujarat KERC Date of issue 13.08.201 4 17.08.2015 10.10.2013 A s proposed in th is discussi on paper Draft/Final Final Order Final Order Final Order Draft Oder Applicability Plant s to b e Plants t o b e Plants to b e Plants to be commissione d commissioned during commission ed commissio ned between FY 2014- 1 st July, 2015 to 31 st d betwee n durin g 15 and FY 2015-16 March, 2018 F Y 1 4 an d 1st F Y 1 8 January,20 1 6 and upto 3 1 s t Marc h, F Y 1 8 Capital cost Rs.6.80 Crores/MW R s. 80,000/kW Rs. 90,000/kW Rs . 75000/ kW CUF 19% 1 9 % 1 9 % 1 9 % Operation and Rs.1124 /kW with an R s, 1090/k W wi th a n 2% of Capital Rs.1500 / maintenance ann ual escalation escalation of 5.72% c o st i.e ., K W (2 % o f expenses of 5.72% Rs.1800/kW th e capit al w it h an cost) with annual a n annu al escalation of escalation 5.72% of
  • 25. 5.72% Life of plant 25 years 25 years 25 years 25 years and machinery Term of Loan 10 years 10 years 10 years 12 years Interest on 13.7 5% 12.70 % 12.50% 12.30% loan Working a)O &M for on e a)O& M expens e f o r 2 months 2 mont hs Capital mon th; o n e month ; receivables receivable s components (b) Receivabl es ( b ) On e month equivale nt t o 2 energ y charge a t mon ths o f energ y normative CUF; charges for sale of electricit y calculat ed o n th e normativ e CUF; (c) Maintenance spar e @ 1 5 % of operatio n an d maintenanc e expense s. ce 15
  • 26. Discussion paper for determination of tariff for Rooftop and Small kilowatt scale solar PV plants Interest on 14.00 % 11.85% 13% 12.50 % working capital Return on 16 % o n normativ e 14% 16% 16% equity equity (M AT / Corporat e Ta x shal l be separately allowed in the tariff) Debt-equity 70 : 30 70:30 70:30 70:30 ratio Depreciation 7% for first 10 years 6% for first 10 years Depreciatio n Depreciati on rate up to maximum of then 2% for the next rate for th e ra te fo r 90 % 15 years first 10 t h e f i r s t 1 2 years= 7% years=5.83 % and the next and th e 15 next 1 3 years=1.33% years=1.54 % Discount 14.42 % 10.647% 13.41% WAC C factor Tariff 7.19/k Wh Rs.8.42/Unit during 1 st 9.56/k Wh T o b e (Without July,2015 t o 31 st withou t determine d Accelerated March, 2016 subsidy Depreciation) Rs.7.83/Unit during 1 st 7.20/k Wh April, 2016 to 31 st with subsidy March, 2017 Rs.7.28/Unit during 1 st April,2017 t o 31 st March, 2018
  • 27. 16
  • 28. Discussion paper for determination of tariff for Rooftop and Small kilowatt scale solar PV plants The tariff allowed in other States on net metering basis for SRTPV Name of State Referen ce Allowable tariff for Solar Rooftop Plant Tamil Nadu TEDA Guideline s fo r Injection upto 90% of the implementation o f LT consumpti on annuall y connectivity/Ne t- wil l b e adjuste d at Metering applicable retail supply tariff. Excess beyond 90% will go as lapsed. Andhra Pradesh Andh ra Prades h Solar Net-metering OR Gross Power Policy-2015 dated meteri ng allowe d at 12.02.2015 ta riff equ al t o the averag e cost to serve determine d b y APERC every year. For FY14, it is Rs.5.25/Unit . Telangana Telangana Solar Policy Net-metering OR Gross 2015 meteri ng i s allowe d. Under gross metering the power would be sold at average cost of service of the DISCOM. The tariff applicable for unit s under n et metering would be at averag e pooled power purchase cost.
  • 29. Maharashtra Net-metering Net energy at the end of Regulations 2015 each Financial year shall b e purchase d b y the DISCO M a t approved Average Cost of Power Purchase for that year. 17
  • 30. Discussion paper for determination of tariff for Rooftop and Small kilowatt scale solar PV plants Rajasthan Net-metering Excess energy of 50units Regulatio ns issue d by or more in month is paid Rajastha n ER C dated at RER C determine d 26.02.2015 & RERC Solar tariff. In case it is less Tariff Order dated than 50 units in a month, 19.06.201 5. th e sam e i s carried forwar d t i l l th e cumulati ve excess reach es 50 Units . A t prese nt RERC ta riff is Rs.6.74/Unit . Punjab Polic y o n net- metering Injection upto 90% of the for grid interactive Roof- consumpti on annuall y top Solar Photo Voltai c wi ll b e adjuste d at Pow er Plants dated applicab le retail supply 05.11.201 4 issued by tariff. Excess beyond 90% Government of Punjab will go as lapsed. Haryana HERC Rooftop solar grid Injection upto 90% of the interactive system based consumpti on annuall y on net- metering wi ll b e adjuste d at Regulatio ns 201 4 dated applicab le retail supply 25.11.201 4 tariff. Excess beyond 90% will go as lapsed. Delhi DERC Guidelines on Net- Excess generation is paid metering Regulations- at Averag e Pooled 2014 Power Purchase Cost to be settled at the end of
  • 31. the year Gujarat Gujarat Solar Policy- 2015 Surplu s ener gy wi ll b e dated 13.08.2015 paid at Average Pooled Power Purchase rate of the year in which the plant is commissioned. 18