The Himachal Pradesh Electricity Regulatory Commission (HPERC) has announced revised solar photovoltaic (PV) tariffs for the fiscal year 2024-25, following consultations with industry stakeholders. The tariffs have been set at INR 3.47-3.55 per kilowatt-hour (kWh), with a revised capital cost assumption of INR 364.11 lakh per megawatt (MW) for projects ranging from 1-5 MW. This is an increase from the initial proposal, which was based on lower module costs. The commission has also maintained a 21% capacity utilization factor (CUF), despite some stakeholders arguing that 16% is a more realistic figure.
The tariff structure is based on the updated capital cost assumptions, with additional allowances for projects located in urban and industrial areas. The tariffs for projects up to 1 MW in non-urban areas stand at INR 3.50 per kWh, while those between 1-5 MW are fixed at INR 3.47 per kWh. For projects in urban and industrial areas, the tariffs are INR 3.55 per kWh for up to 1 MW and INR 3.52 per kWh for 1-5 MW.
The commission has also set financing parameters, including an interest rate of 10.60%, depreciation at 4.67% per annum for the first 15 years, and 1.995% thereafter, and operation and maintenance (O&M) expenses of INR 10.16 lakh per MW with an annual 3.84% escalation. The new tariff structure applies to grid-connected solar PV projects and does not include any subsidies or incentives, but adjustments will be made if developers receive government support.
The HPERC has set the tariffs to promote small and medium-sized solar projects in the state, contributing to Himachal Pradesh’s renewable energy goals and energy security, while ensuring fair returns for developers and reasonable pricing for consumers. These tariffs are expected to attract more developers and investors, driving growth in the solar energy sector in the state.