Gujarat wants cut in solar power tariff for existing Solar Plants

Gujarat, home to half of India’s solar power-plant capacity, is seeking to have a cut on the rate it pays to solar project developers, keeping in view the owners’ excessive and unwanted profits in the current scenario. The state government has approached the Gujarat Electricity Regulatory Commission (GERC) with a petition, seeking a reduction in the solar power tariff, quoting the unwanted and windfall gains to the solar project developers.

The Gujarat Urja Vikas Nigam Limited (GUVNL) had signed a 25-year PPA ( Power purchase agreements ) for 971.5 MW of solar power with 88 developers including Adani Enterprises Ltd., Moser Baer India Ltd., Tata Power Co., and Welspun Energy Ltd. since 2010. For the first 12 years the developers were offered Rs. 15 per unit and Rs 5 per unit for the next 13 years. Currently, a levelised tariff of Rs. 12.54 per unit is being received by the project developers.

According to GUVNL’s filed petition, a reasonable and carefully judged consequent tariff would be about 9 rupees per unit, less than the average levelised current tariff of Rs. 12.54 for the 25 years. The petition filed mentions that the increased tariff of Rs 3.54 per unit is a direct burden on consumers and is an unjustified source of gain to project developers.

“The current outgo (on buying solar power) is quite high, and having a levelised tariff will help them in managing cash flows better”, a GUVNL official stated. The first hearing on whether regulators will accept a case based on the filed petition will be held on July 23. Meanwhile, the project developers are pretending to be anonymous to the entire happenings. A project developer says that they are just waiting to see whether GERC admits GUVNL’s petition or not.