The Himachal Pradesh Electricity Regulatory Commission (HPERC) has issued an order to determine the generic levellised tariff for solar PV projects for the financial year 2025-26. The order is based on the Himachal Pradesh Electricity Regulatory Commission’s 2017 regulations, which promote renewable energy generation and set tariff determination terms. The updated tariff regulations are part of efforts to encourage solar power adoption in the state and ensure fair pricing for power procurement by distribution licensees.
Under the latest order, HPERC has categorized solar PV projects into three groups based on capacity: projects up to 1 MW, projects between 1 MW and 5 MW, and projects above 5 MW. Projects above 5 MW will primarily be procured through Solar Energy Corporation of India (SECI) or competitive bidding. For smaller projects, the commission has specified technology-specific parameters, including capital costs, operation and maintenance expenses, and depreciation rates.
The commission has calculated the normative capital cost for solar PV projects up to 1 MW at ₹334.06 lakh per MW, while projects between 1 MW and 5 MW have a normative cost of ₹330.75 lakh per MW. The capital cost for projects in urban and industrial areas is slightly higher to account for additional costs related to land acquisition and infrastructure. The commission has also determined that the capacity utilization factor (CUF) for solar PV projects will be set at 21%, with a 1.45% loss accounted for in auxiliary consumption and transformation losses.
The levellised tariff for solar PV projects has been set at ₹3.31 per kWh for projects up to 1 MW and ₹3.28 per kWh for projects between 1 MW and 5 MW if located in areas other than urban and industrial zones. For projects in urban and industrial areas, the tariff is slightly higher, at ₹3.36 per kWh and ₹3.34 per kWh, respectively. These tariffs are subject to periodic review and are applicable for projects commissioned between April 1, 2025, and March 31, 2026.
The commission has outlined that the debt-equity ratio for solar PV projects will be 70:30, with an interest rate of 10.95% for loans. The return on equity is set at 14%, with a grossed-up rate of 16.80% for the first 20 years and 19.39% for the remaining five years. Additionally, operation and maintenance (O&M) expenses have been set at ₹10.55 lakh per MW with an annual escalation of 3.84%. The depreciation rate will be 4.67% for the first 15 years and 1.995% thereafter.
HPERC has also factored in subsidies and incentives provided by the central and state governments, which will be adjusted at a rate of ₹0.08 per kWh for every ₹10 lakh per MW of subsidy availed. The order clarifies that this tariff will not apply to solar projects set up by consumers within their premises under net metering schemes.
By issuing this order, HPERC aims to support the growth of solar power in Himachal Pradesh while ensuring cost-effective and competitive electricity generation. Stakeholders have been invited to submit their comments and suggestions on the proposed tariff structure by February 7, 2025.
