GERC Announces Rs 2.76/kWh Tariff for Solar Projects Under 5 MW

10 Sep 2024 CW Team

The benchmark normative capital cost for solar projects below the eligibility threshold for the bidding process has been set at Rs 30.5 million/MW. This determination followed the observation that the tariff discovered in competitive bidding by the Gujarat Urja Vikas Nigam ranged between Rs 2.30/kWh and Rs 2.66/kWh, alongside a decrease in solar module prices during the first quarter of the financial year 2024-25.

The Commission has chosen to maintain operation and maintenance (O&M) expenses at Rs 300,000/MW for the first operational year, with an annual escalation of 3.84% for tariff determination purposes.

The normative Capacity Utilization Factor has been set at 19% for the 25-year project life. A debt-equity ratio of 70:30 will be used for tariff determination. The normative interest rate for term loans is set at 10.15%, with a 15-year loan repayment period.

Depreciation rates are established at 4.67% per annum for the first 15 years and 2% from the 16th to the 25th year.

The working capital requirements for solar projects will include O&M expenses for one month, receivables for one month of electricity sales, and maintenance spares at 1% of the capital cost, escalating to 5% per annum. The normative interest on working capital is set at 10.65%.

In accordance with the GERC Multi-year Tariff Regulations 2024, the Commission has set the return on equity at 15.5% for projects below the eligibility threshold. Additionally, the Minimum Alternate Tax has been set at 17.47% per annum for the first ten years, with a Corporate Tax rate of 34.94% for the subsequent 15 years.

The Commission has considered a discount rate of 9.77% for levelised tariff calculations, reflecting the interest rate on term loans and return on equity. Should project developers receive financial assistance, incentives, subsidies, or other benefits from the Central or State Government, the tariff will be determined accordingly by the Commission.

Your next big infra connection is waiting at RAHSTA 2025 – Asia’s Biggest Roads & Highways Expo, Jio World Convention Centre, Mumbai. Don’t miss out!

The tariff concerning the procurement of power by distribution licensees and others from solar projects in Gujarat has been established for a project life of 25 years. The Commission has introduced an accelerated depreciation benefit of Rs 0.28/kWh and a net tariff of Rs 2.48/kWh. The benchmark normative capital cost for solar projects below the eligibility threshold for the bidding process has been set at Rs 30.5 million/MW. This determination followed the observation that the tariff discovered in competitive bidding by the Gujarat Urja Vikas Nigam ranged between Rs 2.30/kWh and Rs 2.66/kWh, alongside a decrease in solar module prices during the first quarter of the financial year 2024-25. The Commission has chosen to maintain operation and maintenance (O&M) expenses at Rs 300,000/MW for the first operational year, with an annual escalation of 3.84% for tariff determination purposes. The normative Capacity Utilization Factor has been set at 19% for the 25-year project life. A debt-equity ratio of 70:30 will be used for tariff determination. The normative interest rate for term loans is set at 10.15%, with a 15-year loan repayment period. Depreciation rates are established at 4.67% per annum for the first 15 years and 2% from the 16th to the 25th year. The working capital requirements for solar projects will include O&M expenses for one month, receivables for one month of electricity sales, and maintenance spares at 1% of the capital cost, escalating to 5% per annum. The normative interest on working capital is set at 10.65%. In accordance with the GERC Multi-year Tariff Regulations 2024, the Commission has set the return on equity at 15.5% for projects below the eligibility threshold. Additionally, the Minimum Alternate Tax has been set at 17.47% per annum for the first ten years, with a Corporate Tax rate of 34.94% for the subsequent 15 years. The Commission has considered a discount rate of 9.77% for levelised tariff calculations, reflecting the interest rate on term loans and return on equity. Should project developers receive financial assistance, incentives, subsidies, or other benefits from the Central or State Government, the tariff will be determined accordingly by the Commission.

Infrastructure Urban

04 Sep 2025

Kerala Spends Rs 200 Billion During Onam Celebrations

The Kerala state government incurred expenditure totalling Rs 200 billion during the recent Onam season, covering regular financial obligations such as salaries and pensions, as well as festival-related allowances and subsidies, according to Finance Minister K N Balagopal.Of the total spend, Rs 121 billion was allocated towards salaries, pensions, bonuses, and festival allowances for government employees and pensioners. A further Rs 18 billion was disbursed as welfare pensions benefiting 6.2 million recipients, helping households manage festive costs.Food Kits and Festival AllowancesTo support..

Infrastructure Urban

04 Sep 2025

Forest Drive Targets 960 Hectares Under Harit Andhra Plan

District Forest Officer Mahaboob Basha has announced that the Forest Department is intensifying green cover efforts under the Harit Andhra Pradesh initiative, aiming to carry out plantations over 960.48 hectares across five forest divisions in the current financial year.The targeted regions include Udayagiri, Kavali, Atmakuru, Nellore, and Nellore Rural divisions. Thanks to recent rainfall, plantation work has already been completed over 100 hectares, with pit-digging and soil preparation finalised across most remaining sites.The department has readied over 20.65 million saplings in its nurser..

Infrastructure Urban

04 Sep 2025

Telangana Sanctions Rs 2 Billion for Flood Relief Works

The Telangana government has sanctioned Rs 2 billion for immediate relief operations in rain- and flood-affected districts. According to the official orders, Rs 100 million each has been allocated to seven severely impacted districts — Kamareddy, Medak, Nirmal, Adilabad, Nizamabad, Komaram Bheem Asifabad, and Rajanna Sircilla — while the remaining 26 districts will receive Rs 50 million each.The funds will be utilised for urgent repairs to roads, culverts, bridges, and restoration of electricity supply in affected areas. However, the government has clarified that the relief amount cannot b..