CERC announces tariff for solar PV for FY13-14

CERC has recently come up with its tariff order for solar PV for FY-13-14 with a levellised tariff of Rs.8.75/unit which is much less than the tariff of Rs.10.39/unit the previous year. The assumptions for various parameters for calculating the tariff are as provided below:-

  • Capacity Utilisation Factor (CUF) has been assumed at 19% which is the same as last year
  • Capital cost has been taken as Rs.8 cr. per MW which is less than the assumed cost of Rs.10 crores last year
  • Debt-equity ratio is assumed at 70:30
  • Interest on loan is assumed at 13% considering average base rate for first six months of FY12-13 (10%) plus 300 basis points. The assumed interest rate is more than previous year’s rate of 12.30%. Loan repayment period is considered as 12 years
  • Differential depreciation of 5.83% is allowed during first 12 years of the tariff period and 1.54% from 13th year onwards.
  • Pre-tax return on equity of 20% per annum for 1st ten years and 24% per annum from 11th year onwards has been assumed
  • Interest on working capital has been taken at 13.50% considered as weighted average of SBI Base rate prevalent during the first six months of the previous year plus 350 basis points. O & M expenses have been assumed at Rs.11.63 lakhs per MW with 5.72% escalation per annum
  • Levellised tariff is computed over useful life and will be applicable for 25 years

With contributions from Asim Sharma, Consultant, FirstGreen


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