Gujarat proposes new feed-in tariff rates

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  Gujarat's solar industry is growing rapidly and last month a 30MW system was installed in Banaskantha.

The Gujarat Electricity Regulatory Commission (GERC) has proposed the new feed-in tariff (FiT) rates for PV projects commissioned from January 29, 2012 until March 31, 2015. These new rates range from INR10.27 (US$0.21) to INR13.14 per kWh (US$0.268) and are applicable for ground-mounted, rooftop and concentrating solar power (CSP) systems.

Should the proposed rates be confirmed, CSP projects will be eligible to receive levelized tariff payments between INR12.45 (US$0.252) and INR13.14 (US$0.266) per kWh, while systems over 100kW are in line for tariffs from INR10.37 (US$0.21) to INR10.92 (US$0.221) per kWh. Rooftop projects under 100kW will still receive the greatest assistance, with subsidies ranging from INR12.6 (US$0.255) to INR13.24 (US$0.268) per kWh. The deadline for feedback on the new FiT is December 1.

Gujarat’s solar industry is booming at present and this is reflected in the GERC’s change of approach in terms of subsidies; previously PV had been eligible for higher tariffs than CSP, but with PV module and inverter prices continuing to fall, the commission is believed to feel project developers are deserving of less generous handouts.

Another facet of the new FiT is phased subsidies. This will see large-scale PV and CSP projects receive roughly double the subsidy payment level during the first 12 years of operation than in the next 13 years. Tariff levels will also vary depending on whether or projects utilise an accelerated depreciation benefit.

Since 2009, more than 80 companies have signed power purchase agreements worth an estimated 965MW in Gujarat. At first, progress was slow, with red tape and financial difficulties holding up developers. However, the state is finally beginning to deliver on some of its early promise – last month a 30MW system was completed in Banaskantha – and GERC expects many more to be commissioned by the year’s end.