HPERC - SBI MCLR Plus 200 BPs

HIMACHAL PRADESH ELECTRICITY REGULATORY COMMISSION, SHIMLA
Suo-Motu Petition No. 79/2020

CORAM
Sh. Devendra Kumar Sharma
Chairman
Sh. Bhanu Pratap Singh
Member
Date of Order: 13.11.2020
IN THE MATTER OF:-
Determination of Generic Levellised Tariffs for Solar PV Projects for FY
2020-21 under Himachal Pradesh Electricity Regulatory Commission
(Promotion of Generation from the Renewable Energy Sources and
Terms and Conditions for Tariff Determination) Regulations, 2017.
ORDER
1. The Commission notified the Himachal Pradesh Electricity Regulatory

Commission (Promotion of Generation from the Renewable Energy
Sources and Terms and Conditions for Tariff Determination) Regulations,
2017, on 23rd November, 2017 in the Rajpatra, Himachal Pradesh and
carried out the 4th amendment of said regulations on 8th September,
2020 as notified in the Rajpatra, Himachal Pradesh on 15th September,
2020 wherein financial principles for RE technologies for 3rd control
period (i.e. 01.04.2020 to 30.09.2023) have been specified (hereinafter
jointly referred to as “RE Tariff Regulations, 2017”);
2. The Commission, in due discharge of the mandate under regulation 18 of

RE Tariff Regulations, 2017 proposes to determine the generic levellised
tariff of solar PV projects and associated terms and conditions as per
Annexure-“A”;
3. Comments and suggestions of the stakeholders on the above proposal are

invited by 11th December, 2020. A public hearing on the above proposal
will be held on 21st December, 2020 at 11.30 AM onwards.
Sd/- Sd/-
(Bhanu Pratap Singh) (Devendra Kumar Sharma)
Member Chairman
1

Annexure-“A”
Generic levellised tariffs for Solar PV Projects for FY 2020-21 under RE

Tariff Regulations, 2017.-
1. The Commission notified the Himachal Pradesh Electricity Regulatory
Commission (Promotion of Generation from the Renewable Energy Sources
and Terms and Conditions for Tariff Determination) Regulations, 2017, on
23rd November, 2017 in the Rajpatra, Himachal Pradesh and carried out the
4th amendment of said regulations on 8th September, 2020 as notified in the
Rajpatra, Himachal Pradesh on 15th September, 2020 wherein financial
principles for RE technologies for 3rd control period (i.e. 01.04. 2020 to
30.09.2023) have been specified (hereinafter jointly referred to as “RE Tariff
Regulations, 2017”).
1.
The regulation 18 of the RE Tariff Regulations, 2017, provides that:-
“18 (1)………..xxxxxxxxxx…………
(2) Where the technological specific parameters and other terms and
conditions, including the tariff period and useful life of the project, have not
been specified, the Commission may, by an order, at any time and at such
intervals as it considers appropriate to do so, fix the same:
Provided that…………………xxxxxxx…………
Provided further that the Commission may, by order, categorise
the renewable energy projects, other than small hydro projects, under the
respective renewable energy technologies specified in sub–regulation (1),
based on the capacity of projects, the available subsidy schemes and such
other factors as may be considered appropriate by it:
Provided further that the Commission may, in order to promote
such technologies for smaller capacities, follow, mutatis mutandis, upto the
limits as it may consider necessary separately for each such technology but
not exceeding 5 MW for any such technology, any or all of the technological
specific parameters, including capital cost, and other terms and conditions
or the tariff, in respect of the relevant part of the control period for the
relevant renewable energy technology, as it may deem fit -
(a) as specified or adopted by the Central Commission for determining
project specific tariff for any project(s) or generic levellised tariff for any
category of project(s); or
(b) the rate discovered though competitive bidding undertaken by any
Government agency; or
(c) the inputs available from any other sources, as the Commission may
find appropriate:
Provided further that the financial norms, except for capital cost,
as specified under Chapter-IV of these Regulations shall also be considered
as ceiling norms.
(3) The Commission may, after having fixed the norms/parameters and
other related terms and conditions as per sub-regulation (2), determine, or
otherwise fix, by order, either generic levellised tariff(s) for any or all
categories of such renewable energy technology(ies):
Provided that the Commission may, by order, fix, at such time
intervals as it may consider appropriate, the ceiling rates and associated
terms and conditions to be used by the licensee for reverse bidding for
procurement of power from the projects based on such technologies.
2

(4) …….xxxxxxxxxx………… .
(5) ………xxxxxxxxxx……….. .
2. In view of above provisions contained in regulation 18 of the RE Tariff

Regulations, 2017, the Commission proposes to categorize the solar PV
plants and also to fix the technological specific norms for the financial year
2020-2021 and also the generic levellised tariff for procurement of power by
the distribution licensee from solar PV plants as detailed in the succeeding
paragraphs.
3. Categorization.-
The 2nd proviso of sub-regulation (2) of regulation 18 of RE Tariff
Regulations, 2017 provides that the Commission may, by order, categorize
the renewable energy technologies other than SHPs based on capacity of the
projects, the available subsidy scheme and such other factors as may be
considered appropriate by it. The Commission, after taking into account
various factors like geographical and topographical conditions in the State
and in order to promote smaller capacities of solar PV plants at different
locations across the State, categorized solar PV projects vide its previous
orders of solar PV tariff determination. The Commission proposes to retain
similar categorization, as mentioned in the table below, for the solar PV
generation capacity for the purposes of normative capital cost and
determination of levellised tariffs for FY 2020-21:-
Capacity Capacity of Solar PV Project at one site

I Upto 1 MW capacity
II Above 1 MW to 5 MW capacity
III Above 5 MW capacity
Since the capacity in the second category is proposed to be limited to 5.00

MW, so the Commission expects that for higher capacities, the Distribution
Licensee shall preferably purchase solar power through Solar Energy
Corporation of India or else through the competitive bidding route. All the
solar PV projects with a capacity of more than 5.00 MW shall accordingly fall
under the third category.
4. Technology Specific Parameters.-
The sub-regulation (2) of regulation 18 of the RE Tariff Regulations, 2017
provides that the Commission may, in order to promote such technologies
for smaller capacities, follow, mutatis mutandis, upto the limits as it may
consider necessary separately for each such technology but not exceeding
5.00 MW for any such technology, the technological specific parameters,
including capital cost, and other terms and conditions, or the tariff as
specified or adopted by the Central Commission for determining project
specific tariff for any project(s) or generic levellised tariff for any category of
3

project(s); or the inputs available from any other sources, as the Commission
may find appropriate.
The Central Commission has notified Renewable Energy Regulations, 2020
i.e. Central Electricity Regulatory Commission (Terms and Conditions for
Tariff Determination from Renewable Energy Sources) Regulations, 2020
(hereinafter referred as “CERC RE Tariff Regulations, 2020”. The Central
Commission has specified the technological parameters i.e. normative
Capacity Utilization Factor (CUF) for solar PV projects as 21%. However, for
capital cost and O&M expenses, the CERC RE Tariff Regulations, 2020
provides that for these parameters, only project specific parameter(s), based
on prevailing market trends, shall be taken into consideration.
The CERC has not made any provision for determination of normative
(benchmark) capital cost for solar PV projects and its RE Tariff Regulations,
2020 do not envisage such a generic tariff determination. Accordingly, the
Commission proposes to evolve its own technology specific parameters after
taking into account the various available inputs, including those notified by
the CERC and considered by the HPERC in its previous solar PV tariff
determination orders.
4.1 CAPITAL COST.-

As per the website reports of pvinsights, the latest solar PV Module Weekly
Spot Price accessed on 21.10.2020 as under:-
USD/Watt
Item High Low Average
Poly Solar Module 0.280 0.160 0.173
Thin Film Solar Module 0.310 0.200 0.213
The Commission proposes the cost of Solar PV Module as Rs. 144.17

Lakhs/ MW considering the exchange rate of Rs. 74.70/USD based on the
average of six months, i.e. 29th April, 2020 to 21st October, 2020 and
module cost of 0.193 USD/Watt. The Commission proposes to adopt an
all inclusive solar PV module rate of Rs. 157.15 Lakhs/MW after
escalating the above rate by about 9% to cover various miscellaneous
costs including degradation of cells and taxes etc. The auxiliary
consumption of 0.75% has been taken separately in view of CERC
provisions.
After taking into account the State specific features, the Commission
proposes to fix the normative capital cost for the solar PV projects above
1.00 MW to 5.00 MW capacity as under:-
Sr. No. Particulars Capital Cost norm
(Rs. Lakh/MW)
1 PV Modules 157.15
2 Preliminary and Pre-operative expenses, Land 132.30
Cost, Civil & General Works and Mounting
Structures
3 Power Conditioning Units 31.50
4 Evacuation cost upto interconnection point 52.50
Total Capital Cost 373.45
4

The normative capital cost for the solar PV projects upto 1.00 MW is
proposed to be fixed by allowing an increase of about 1.5% on the
normative cost for the projects above 1.00 MW and upto 5.00 MW as
proposed above. Accordingly the normative capital cost for the solar PV
projects upto 1.00 MW is proposed to be fixed as Rs. 379.05 Lakhs per
MW.
In line to the previous solar PV tariff determination orders, the

Commission also proposes to allow marginally higher capital cost in
respect of Solar PV project(s) to be set up in Urban areas and Industrial
areas notified by the State Government so as to encourage installation of
such plant in such areas, keeping in view the fact that location of plants
in such areas may generally help the distribution licensee to utilize the
power from such plant in more optimum manner.
As such the additional capital cost for these area specific solar PV
project(s) is proposed as Rs. 10.00 Lakhs per MW (for capacity above 1.00
MW and upto 5.00 MW) over and above the normative capital cost
considered for the project(s) to be set up in the areas other than Urban
and Industrial areas. This additional cost of Rs. 10.00 Lakhs per MW shall
however be further increased by 1.5% for plants upto 1.00 MW located in
the urban areas and industrial areas.
Explanation;-
For the purpose of this tariff order-
(a) The “Urban Areas” mean the areas covered under a Municipal Corporation,
Municipal Council or a Nagar Panchayat set up by the State Government
under any law enacted by the State Legislative Assembly and shall also
include the area falling under the Cantonment Board constituted by the
Central Government under the Cantonment Act, 2006.
(b) The “Industrial areas” mean the areas notified as such by the State
Government through its Industries Department or through any such other
department/agency authorized by it.
(c) For this purpose, a solar PV project shall be considered to be situated in the
urban area or industrial area, as the case may be, if any one or both of the
main components of the project i.e. the generating plant and the
interconnection point fall in any such area(s) on the date of filing the
petition for approval of PPA.
Accordingly, proposed Normative Capital Cost for respective categories of Solar

PV plant is tabulated as under:-
Sr. No. Category Capital Cost norm
(Rs. Lakhs/MW)
1 Projects to be set up in areas other than urban areas and industrial areas
(a) Upto 1.00 MW 379.05
(b) Above 1.00 MW & upto 5.00 MW 373.45
2 Projects to be set up in urban areas and industrial areas
(a) Upto 1.00 MW 389.20
(b) Above 1.00 MW & upto 5.00 MW 383.45
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4.2 OPERATION AND MAINTENANCE EXPENSES.-
The Commission considered the O&M expenses as Rs. 8.27 Lakhs/MW with
escalation @ 5.72% for FY 2019-20 in its solar PV tariff order dated
20.01.2020.
The O&M expenses of Rs. 8.74 Lakh/MW are proposed to be considered for
FY 2020-21. These normative O&M charges shall also be escalated @ 3.84%
per annum over the tariff period as per the RE Tariff Regulations, 2017.
4.3 NORMATIVE NET SALEABLE ENERGY.-

The CERC RE Tariff Regulations, 2020 provides that the annual normative
Capacity Utilization Factor (CUF) of solar PV plant shall be 21%. The
Commission proposes to adopt this norm. The deduction on account of
auxiliary consumption, transformation losses and the project line losses are
proposed to be made at a composite rate of 1.45% of the gross generation
worked out on the basis of the normative CUF of 21% to cover the auxiliary
consumption, transformation losses and project line losses upto
interconnection point on normative basis.
4.4 The other technology specific parameters viz. useful life of the project and
tariff period, have already been specified in the RE Tariff Regulations, 2017,
which are otherwise in line with the CERC Regulations also and the same
shall be followed accordingly.
5. After having proposed the technology specific parameters as above, the

Commission now proceeds to determine the generic levellised tariffs, based on
the provisions of RE Tariff Regulations, 2017 (i.e. 01.04.2020 to 30.09.2023) for
solar PV projects for FY 2020-21 under regulation 18 of the RE Tariff
Regulations, 2017. The main details of the proposed tariffs are as follows:-
5.1 TARIFF STRUCTURE.-
Regulation 12 of the RE Tariff Regulations, 2017 stipulates that single part
levellised tariff structure, comprising of the following fixed cost components
shall be followed and that in case, where, no fuel cost component is involved
in power generation, the following parameters shall be considered:-
(a) Return on Equity;
(b) Interest on loan capital;
(c) Depreciation;
(d) Interest on working capital.
Accordingly, single part generic levellised tariffs have been worked out for
the respective categories of solar PV projects by adopting the methodology,
discussed in succeeding paragraphs.
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5.2 TECHNOLOGICAL SPECIFIC PARAMETERS.-
The normative parameters for capital cost, O&M charges, CUF, applicability
of tariff as discussed in para 4 above, have been followed.
5.3 USEFUL LIFE AND TARIFF PERIOD.-

Regulation 10, read with clause (ac) of sub-regulation (1) of regulation 2 of
the RE Tariff Regulations, 2017, specifies the ‘useful life’ and tariff period in
relation to a Solar PV plant as 25 years from the date of commencement of
operation of the project. Accordingly, the useful life and tariff period has been
taken as 25 years which is also in line with CERC RE Tariff Regulations,
2020.
5.4 DEBT EQUITY RATIO.-

The normative debt equity ratio has been considered as 70:30 in
accordance with regulation 23-B of the RE Tariff Regulations, 2017.
5.5 Return on Equity.-

Regulation 26-B of the RE Tariff Regulations, 2017 provides that the value
base for the equity (on which return on equity shall be calculated) shall be
equal to the equity component computed in accordance with the
provisions of regulation 23-B.
The normative Return on Equity shall be 14%. The normative Return on

Equity shall be grossed up by the latest available notified Minimum
Alternate Tax (MAT) rate for the first 20 years of the Tariff Period and by
the latest available notified Corporate Tax rate for the remaining Tariff
Period.
5.6 Interest on Loan.-
The sub-regulation (1) of regulation 24-B of the RE Tariff Regulation, 2017
provides that the loan tenure of 15 years shall be considered for the
purpose of determination of tariff for RE projects. Sub-regulation (2) of the
said regulation provides for computation of rate of interest of loan as
under:-
“(2) Interest Rate.-
(a) The loan amount (i.e. the debt component) arrived at in the manner
indicated in the regulation 23-B shall be considered as gross normative loan
for calculation of interest on loan. The normative loan outstanding as on 1st
April of every year shall be worked out by deducting the cumulative repayment
up to 31st March of previous year from the gross normative loan.
(b) For the purpose of computation of tariff(s) under these Regulations,
normative interest rate of two hundred (200) basis points above the average
State Bank of India Marginal Cost of Funds based Lending Rate (MCLR) (one
year tenor) prevalent during the last available six months, prior to the
respective date(s) from which such tariff(s) the respective generic levellised
tariffs are to be made applicable, shall be considered:
Provided that in case where the project specific tariff ……. .
(c) Notwithstanding any moratorium period availed by the renewable energy
generator, the repayment of loan shall be considered from the first year of
the tariff period and shall be equal to the annual depreciation allowed.
7

(d) The loan repayment for a financial year or the relevant part period thereof
shall be considered to have been done in the middle of that financial year or
the relevant part period thereof, as the case may be.”
In view of above, the interest rate has been worked out as 9.91% per
annum by adding 200 basis points above the average of Marginal Cost of
Funds based Lending Rate (MCLR) (one year tenor) of State Bank of India
(SBI) prevalent during the last available six months preceding the date of
commencement of the RE Tariff Regulations, 2017 as shown in the table
below:-
Month Tenor-wise MCLR of SBI

October, 2019 8.05
November, 2019 8.00
December, 2019 7.90
January, 2020 7.90
February, 2020 7.85
March, 2020 7.75
Avg. for last available 6 months. 7.91
5.7 Depreciation.-
(i)Regulation 25-B of the RE Tariff Regulations, 2017 provides as under:
“For the purpose of tariff determination, depreciation shall be computed in the
following manner, namely:-
(a) the value base for the purpose of depreciation shall be equal to sum total of
the debt and equity components as per the provisions of regulation 23-B;
(b) the salvage value shall be considered as 10% and depreciation shall be
allowed up to maximum of 90% of the value base as per clause (a) of this
regulation:
Provided that no depreciation shall be allowed to the extent of
incentive, grant and capital subsidy available for the project.
(c) depreciation per annum shall be based on ‘Differential Depreciation

Approach’. For tariff purposes, the depreciation shall be allowed @ 4.67%
per annum of the value base as per clause (a) of this regulation till such
time the requirement for repayment of loan component of the capital cost as
per regulations 21-B, 23-B and 24-B is fully provided and the remaining
depreciation shall be spread over the residual useful life of the project on
straight line method;
(d) depreciation shall be chargeable from the first year of commencement of

operation of the project:
Provided that ………….. purposes of project specific determination of
tariff.”
Accordingly, the rate of depreciation for the first 15 years has been
considered as 4.67% and the rate of depreciation from the 16th year onwards
has been spread over the balance useful life as under:-
Details Solar PV Power Plant
Useful life (in years) 25
Rate of depreciation for 15 years (%) 4.67
Rate of depreciation after first 15 years (%) 1.995
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5.8 Interest on working capital.-
(i) In accordance with the regulation 27-B of the RE Tariff Regulations,
2017, the working capital requirement of the Solar PV project has been
considered by including the following:-
“(a) operation and maintenance expenses for one month;
(b) receivables equivalent to 45 days of energy charges for sale of electricity
calculated on the net saleable energy corresponding to the CUF considered
for tariff determination on normative basis;
(c) maintenance spare @ 15% of operation and maintenance expenses.”
(ii) Interest rate on working capital has been worked out as 11.41 % per
annum by the adding 350 basis points above the average of Marginal
Cost of Funds based Lending Rate (MCLR) (one year tenor) of State
Bank of India (SBI) prevalent during the last available six months prior
to the respective date(s) from which the generic tariff(s) are to be made
applicable.
5.9 Incentive and/or subsidy and/or grant/budgetary support by the

Central/State Government.-
The sub-regulation (1) of regulation 22-B of the RE Tariff Regulations,
2017 provides as under:-
“ (1) While determining the generic levellised or project specific levellised tariff,
as the case may be, for the renewable energy project(s) under these
Regulations, the Commission shall take into consideration any incentive and/or
subsidy and/or grant available under the schemes of the Central or State
Government or their agencies, but excluding accelerated depreciation benefit
under the Income Tax Act:
Provided that the capital subsidy under the schemes of the Central or
State Government or their agencies shall be adjusted in the normative capital
cost and the cost so arrived, after such adjustment, shall be considered for
computing Debt-Equity Components for the purposes of determination of generic
levellised tariffs:
Provided further that where the Central Government or the State
Government notifies, or has notified, any generation based incentive (GBI)
scheme for a particular kind of renewable technology, such technology based
generating station shall be assumed to have availed the benefit of such a
scheme and their tariffs shall be reduced by the amount of generation based
incentive (GBI) per unit for the period during which such incentive remains
applicable.
(2) Where any additional project specific grant or budgetary support is

available to any project, apart from the incentive and/or subsidy and/or grant
available under sub-regulation (1) of this regulation, the Commission shall
account for such budgetary support also, while determining project specific
levellised tariff.
(3) The amount of subsidy shall be considered for each renewable source
as per the applicable policy of the MNRE/State Government/Central
Government and if the amount and/or mechanism of subsidy is changed by the
MNRE/State Government/ Central Government, consequent corrections in tariffs
may be carried out by the Commission in accordance with regulation 20.”
9

5.10 No adjustment of incentive and/or subsidy and/or grant is being made in the
tariff calculations being carried out in this order. However, adjustment to be
made in the rate on per million of subsidy for each MW capacity have been
worked out and mentioned in the attached calculation sheets for each
category of the project and adjustment, if any, on account of the same shall
be made at appropriate stage while applying the tariff after taking into
account the eligibility conditions in each case. Similarly, adjustment on
account of subsidy scheme(s) of Government (Central/State) shall also be
made at appropriate stage(s) after taking into account the extent of
subsidy(ies) available under such scheme(s). The adjustments on account of
subsidies, where available, are to be made at the rates indicated in the
calculation sheets on normative basis by considering the provisions of
regulations 20-B, 23-B, 24-B, 25-B and 26-B.
5.11DISCOUNT FACTOR.-
In accordance with sub-regulation (4) of regulation 12 of the RE Tariff
Regulations, 2017, the discount factor equivalent to the post tax weighted
average cost of capital has been considered for the purpose of levellised
tariff computation. The discount factor has been calculated on this basis
of the normative debt equity ratio (70:30) and weighed average of the post
tax rates for debt and equity component. For this purpose, the interest
rate on the loan component (i.e. 70%) of capital cost is 9.91%. For equity
component (i.e. 30%), rate of Return of Equity (RoE) is considered as post
tax rate of 14%. The discount factor has been calculated as 9.12%. The
Corporate tax has been taken as 29.12% (25% IT rate+ 12% Surcharge+
4% Health and Education cess).
6. GENERIC LEVELLISED TARIFFS AND ASSOCIATED TERMS &

CONDITIONS.-
In light of the discussions made in the preceding paragraphs, the generic
levellised tariffs and the associated terms and conditions for solar PV power
project for FY 2020-21 under the RE Regulations, 2017 have been arrived at
and are proposed as under:-
A. The generic levellised tariffs for Solar PV power projects for FY 2020-21
shall be as under:-
Sr. Capacity Generic levellised tariff
No. (Rs. Per kWh)
1 Projects to be set up in other than industrial areas and urban
areas
(a) Upto 1.00 MW 3.41
(b) Above 1.00 MW & upto 5.00 MW 3.37
2 Projects to be set up in industrial areas and urban areas
(a) Upto 1.00 MW 3.48
(b) Above 1.00 MW & upto 5.00 MW 3.44
10

B. These tariffs shall be subject to the RE Tariff Regulations, 2017 and the
orders as may be issued by the Commission thereunder from time to
time.
C. These tariffs are applicable to solar photovoltaic (PV) power projects
which directly convert Solar Energy into Electricity, using the crystalline
silicon or thin film technology or any other technology as approved by
the Ministry of New and Renewable Energy and are connected to the
Grid.
D. These tariffs do not take into account any capital subsidy or any
incentive or grant/budgetary support etc. and the adjustment in this
regard shall be carried out in accordance with the RE Regulations, 2017.
The adjustments, if any, to be made at the rate per kWh by considering
Rs. 10.00 lacs per MW subsidy have however been indicated in the tariff
calculation sheets.
E. These tariffs shall be applicable in the following cases:-
(i) where the joint petition for approval of PPA has been submitted to the
Commission on or after 01.04.2020, but not later than 31.03.2021 and
such project is commissioned on or before 31.03.2022:
Provided that these rates shall not be applicable in cases
where the joint petition for the approval of PPA were filed from
01.04.2020 to 20.07.2020 in view of the relaxation allowed by the
Commission due to situation arising out of COVID-19;
or
for such capacities as are commissioned during the year
2020-21 for which the PPAs were approved on or before 31.03.2019 i.e.
for the capacities for which the generic levellised tariff for 2020-2021 is
applicable in accordance with the provisions of the PPAs, the applicable
Tariff Order(s) of previous years & the applicable RE Tariff Regulations.
F. These tariffs shall not be applicable in cases where the distribution

licensee procures power through Solar Energy Corporation of India or
through competitive bidding at its level in accordance with Section 63 of
the Electricity Act, 2003.
G. These tariffs shall not be applicable in case of the solar PV projects which
are installed by the consumers within their premises (rooftop or ground
mounted) under net metering scheme.
7. The detailed computations for generic levellised tariffs for categories of solar
PV power projects, without considering any subsidies/incentives/grants, for
FY 2020-21 as well as illustrations thereof are attached as per Appendix – “I
& II” and “III & IV”.
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Appendix - I
Assumption Parameters for Solar PV Power Projects upto 1 MW

(for project(s) to be setup in area other than Industrial areas and Urban areas)
Sr. No Assumption Head Sub Head Sub Head(2) Unit Value

1 Power Capacity Installed Generation Capacity KW 1000
Generation Capacity Utilisation Factor % 0.21
Transmission losses, Auxillary % 1.45
Consumption including Transformation
Losses
Useful Life % 25
2 Project Cost Capital Cost /MW Project Cost Rs. Lacs/MW 379.05

3 Project Financing Debt Equity Tariff Period Year 25
Debt % 70
Equity % 30
Debt Component Loan Amount Rs. Lacs/MW 265.335
Moratorium Period Year 0
Repayment Period Year 15
Interst Rate % 9.91
Equity Component Equity Amount Rs. Lacs/MW 113.715
Return of equity for first 20 Years % 16.96
Return of equity from 21st Years % 19.75
onwards
4 Subsidy Subsidy 0
5 Depreciation Depreciation Recovery of Depreciation % 90
Annual Rate of Depreciation till % 4.67
completion of Loan Repayment
(balance spread in remaining years)
16th year Onward % 1.995
6 Operation & Total O&M Expenses Rs. Lacs/MW 8.74
Maintenance Annual Escalation % 3.84
7 Working Capital O&M Charges Months 1
Maintenance Spares % of O&M expenses of a 15
Year
Recievables Months 1.5
Interest on Working capital % 11.41
8 Discount Factor Discount Rate % 9.12
Sheet of Appendix I
Determination of Tariff for Solar PV Power Projects up to 1 MW
Unit Generation unit year 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

Installed Capacity KW 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000
Gross generation MU 1.840 1.84 1.84 1.84 1.84 1.84 1.84 1.84 1.84 1.84 1.84 1.84 1.84 1.84 1.84 1.84 1.84 1.84 1.84 1.84 1.84 1.84 1.84 1.84 1.84
Losses MU 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45
Net Generation MU 1.813 1.81 1.81 1.81 1.81 1.81 1.81 1.81 1.81 1.81 1.81 1.81 1.81 1.81 1.81 1.81 1.81 1.81 1.81 1.81 1.81 1.81 1.81 1.81 1.81
Fixed Cost year
O&M Expences Rs lacs 8.74 9.076 9.42 9.79 10.16 10.55 10.96 11.38 11.81 12.27 12.74 13.23 13.74 14.26 14.81 15.38 15.97 16.58 17.22 17.88 18.57 19.28 20.02 20.79 21.59
Depriciation Rs lacs 17.70 17.70 17.70 17.70 17.70 17.70 17.70 17.70 17.70 17.70 17.70 17.70 17.70 17.70 17.70 7.56 7.56 7.56 7.56 7.56 7.56 7.56 7.56 7.56 7.56
Interest on Term Loan Rs lacs 25.42 23.67 21.91 20.16 18.41 16.65 14.90 13.15 11.39 9.64 7.89 6.14 4.38 2.63 0.88 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Interest on Working Capital Rs lacs 1.27 1.25 1.24 1.23 1.22 1.21 1.21 1.20 1.19 1.18 1.18 1.17 1.17 1.16 1.16 1.03 1.05 1.08 1.10 1.13 1.20 1.23 1.26 1.30 1.33
Return on Equity Rs lacs 19.29 19.29 19.29 19.29 19.29 19.29 19.29 19.29 19.29 19.29 19.29 19.29 19.29 19.29 19.29 19.29 19.29 19.29 19.29 19.29 22.46 22.46 22.46 22.46 22.46
Total fixed Cost Rs lacs 72.41 70.98 69.57 68.17 66.78 65.41 64.05 62.71 61.39 60.08 58.79 57.52 56.28 55.05 53.84 43.26 43.87 44.51 45.17 45.86 49.80 50.54 51.31 52.11 52.94
Levellised CoG
Per unit CoG Unit levellised
O&M Expences Rs/kWh 0.67 0.48 0.50 0.52 0.54 0.56 0.58 0.60 0.63 0.65 0.68 0.70 0.73 0.76 0.79 0.82 0.85 0.88 0.91 0.95 0.99 1.02 1.06 1.10 1.15 1.19
Depriciation Rs/kWh 0.88 0.98 0.98 0.98 0.98 0.98 0.98 0.98 0.98 0.98 0.98 0.98 0.98 0.98 0.98 0.98 0.42 0.42 0.42 0.42 0.42 0.42 0.42 0.42 0.42 0.42
Interest on Term Loan Rs/kWh 0.72 1.40 1.31 1.21 1.11 1.02 0.92 0.82 0.73 0.63 0.53 0.44 0.34 0.24 0.15 0.05 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Interest on Working Capital Rs/kWh 0.07 0.07 0.07 0.07 0.07 0.07 0.07 0.07 0.07 0.07 0.07 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.07 0.07 0.07 0.07 0.07
Return on Equity Rs/kWh 1.08 1.06 1.06 1.06 1.06 1.06 1.06 1.06 1.06 1.06 1.06 1.06 1.06 1.06 1.06 1.06 1.06 1.06 1.06 1.06 1.06 1.24 1.24 1.24 1.24 1.24
Total CoG Rs/kWh 3.41 3.99 3.9154 3.84 3.76 3.68 3.61 3.53 3.46 3.39 3.31 3.24 3.17 3.10 3.04 2.97 2.39 2.42 2.46 2.49 2.53 2.75 2.79 2.83 2.87 2.92
Discounted factor % 1 0.92 0.84 0.77 0.71 0.65 0.59 0.54 0.50 0.46 0.42 0.38 0.35 0.32 0.29 0.27 0.25 0.23 0.21 0.19 0.17 0.16 0.15 0.13 0.12
Levellised Tariff Rs/kWh 3.41 3.99 3.5881 3.22 2.89 2.60 2.33 2.09 1.88 1.68 1.51 1.35 1.21 1.09 0.98 0.88 0.64 0.60 0.56 0.52 0.48 0.48 0.45 0.41 0.39 0.36
Generic Levellised Tariff (without Subsidy) at Capital Cost of Rs 379.05 Lac/MW = Rs. 3.41 /kWh
Indicative Generic Levellised Tariff by considering Subsidy/Incentive/Grant of Rs 10 Lac/MW = Rs. 3.34 /kWh
Adjustment to be made per 10 Lac of Subsidy/Incentive/Grant per MW= Rs. 0.07/kWh
Appendix - II
Assumption Parameters for Solar PV Power Projects above 1 MW upto 5 MW


Losses
Useful Life % 25

Debt % 70
Equity % 30
Interst Rate % 9.91
onwards
4 Subsidy Subsidy 0
Year
Sheet of Appendix II
Determination of Tariff for Solar PV Power Projects above 1MW upto 5 MW

Losses MU 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45
Fixed Cost year
Levellised CoG
Total CoG Rs/kWh 3.37 3.94 3.8652 3.79 3.71 3.64 3.56 3.49 3.42 3.35 3.28 3.21 3.14 3.07 3.00 2.94 2.36 2.40 2.43 2.47 2.51 2.72 2.76 2.81 2.85 2.90
Appendix - III
Assumption Parameters for Solar PV Power Projects upto 1 MW

(for project(s) to be setup in Industrial areas and Urban areas)

Losses
Useful Life % 25

Debt % 70
Equity % 30
Interst Rate % 9.91
onwards
4 Subsidy Subsidy 0
Year
Sheet of Appendix III
Determination of Tariff for Solar PV Power Projects up to 1 MW
Losses MU 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45
Fixed Cost year
Levellised CoG
Total CoG Rs/kWh 3.48 4.09 4.0062 3.93 3.85 3.77 3.69 3.61 3.53 3.46 3.38 3.31 3.24 3.17 3.10 3.03 2.43 2.46 2.50 2.53 2.57 2.79 2.83 2.88 2.92 2.97
Appendix - IV
Assumption Parameters for Solar PV Power Projects above 1 MW upto 5 MW


Losses
Useful Life % 25

Debt % 70
Equity % 30
Interst Rate % 9.91
onwards
4 Subsidy Subsidy 0
Year
Sheet of Appendix IV
Determination of Tariff for Solar PV Power Projects Above 1 MW upto 5 MW

Losses MU 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45
Fixed Cost year
Levellised CoG
Total CoG Rs/kWh 3.44 4.03 3.9548 3.88 3.80 3.72 3.64 3.57 3.49 3.42 3.34 3.27 3.20 3.13 3.06 2.99 2.40 2.44 2.47 2.51 2.55 2.77 2.81 2.85 2.89 2.94

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HIMACHAL PRADESH ELECTRICITY REGULATORY COMMISSION, SHIMLA

Suo-Motu Petition No. 79/2020

1. The Commission notified the Himachal Pradesh Electricity Regulatory

2. The Commission, in due discharge of the mandate under regulation 18 of

3. Comments and suggestions of the stakeholders on the above proposal are

Generic levellised tariffs for Solar PV Projects for FY 2020-21 under RE

2. In view of above provisions contained in regulation 18 of the RE Tariff

Capacity Capacity of Solar PV Project at one site

Since the capacity in the second category is proposed to be limited to 5.00

4.1 CAPITAL COST.-

The Commission proposes the cost of Solar PV Module as Rs. 144.17

In line to the previous solar PV tariff determination orders, the

Accordingly, proposed Normative Capital Cost for respective categories of Solar

4.3 NORMATIVE NET SALEABLE ENERGY.-

5. After having proposed the technology specific parameters as above, the

5.3 USEFUL LIFE AND TARIFF PERIOD.-

5.4 DEBT EQUITY RATIO.-

5.5 Return on Equity.-

The normative Return on Equity shall be 14%. The normative Return on

Month Tenor-wise MCLR of SBI

(c) depreciation per annum shall be based on ‘Differential Depreciation

(d) depreciation shall be chargeable from the first year of commencement of

5.9 Incentive and/or subsidy and/or grant/budgetary support by the

(2) Where any additional project specific grant or budgetary support is

6. GENERIC LEVELLISED TARIFFS AND ASSOCIATED TERMS &

F. These tariffs shall not be applicable in cases where the distribution

Assumption Parameters for Solar PV Power Projects upto 1 MW

Sr. No Assumption Head Sub Head Sub Head(2) Unit Value

2 Project Cost Capital Cost /MW Project Cost Rs. Lacs/MW 379.05

Unit Generation unit year 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

Assumption Parameters for Solar PV Power Projects above 1 MW upto 5 MW

Sr. No Assumption Head Sub Head Sub Head(2) Unit Value

2 Project Cost Capital Cost /MW Project Cost Rs. Lacs/MW 373.45

Unit Generation unit year 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

Assumption Parameters for Solar PV Power Projects upto 1 MW

Sr. No Assumption Head Sub Head Sub Head(2) Unit Value

2 Project Cost Capital Cost /MW Project Cost Rs. Lacs/MW 389.20

Assumption Parameters for Solar PV Power Projects above 1 MW upto 5 MW

Sr. No Assumption Head Sub Head Sub Head(2) Unit Value

2 Project Cost Capital Cost /MW Project Cost Rs. Lacs/MW 383.45

Unit Generation unit year 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

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