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Karnataka Solar PV Policy- 2018- Key Order Points

This article shows the key takeaway points from the KERC Order dated 18th May 2018.

"Determination of tariff and other norms in respect of new Solar Power Projects (Ground-mounted and Solar Rooftop Photovoltaic Units)"

Previous Order- 2nd May 2016 - 31st March 2018.

Scope- PPA's signed on or after 1st April 2018

Determination of the key parameters-

a. Life of the Plant-

25 years

b. Term of Tariff Design-

Levelised single part tariff for 25 years.

c. Degradation Factor-

Reduction of 0.5% of net generation as annual degradation from the fifth year onwards for MW scale projects.

d. Capacity Utilization factor-

19% for Solar Rooftop and Small Solar PV plants.

e. Capital Cost-

Capital cost of Rs.350 Lakhs per MW for MW scale projects and Rs 40,000 per kW for kW scale SRTPV projects.

f. Debt-Equity Ratio-


g. Tenure of Debt-

Loan Repayment Tenure of 13 years.

h. Interest on Term Loan-

10% per annum.

i. Operations and Maintenance expense

O&M expenses at Rs.600/kW SRTPV plants and at Rs.4.5 Lakh/MW for ground-mounted Megawatt Scale solar plants, with an annual escalation of 5.72%.

j. Working Capital

One month's receivables for SRTPV projects and two months' receivables for megawatt-scale ground-mounted Solar Power Projects.

k. Interest on Working capital

11% towards interest on working capital for solar PV and solar rooftop PV plants.

l. Return on Equity (RoE):

14% Return on Equity.

m. Depreciation

Depreciation on 90% of the capital cost (excluding land cost) at a rate of 5.38% for the first 13 years, remaining spread over the next 12 years.

n. Auxiliary consumption:

The Commission, therefore, decides to allow auxiliary consumption of 0.25% for MW solar photovoltaic plants and not to allow any auxiliary consumption for SRTPV plants.

o. Other issues

(a) Sanction Load:

The Commission decides to continue the installation of SRTPV with a capacity equivalent to 100% of the sanctioned load of the respective consumer's installation.

(b) Multiple SRTPV

The Commission decides to continue the scheme of multiple SRTPV installations in single premises as per the 15.09.2017 order, but at 90% of the tariff as determined by the Commission in this Order.

4. Abstract of cost parameters approved by the Commission:

5. Tariff

Tariff Applicability-

01.04.2018 - 31.03.2019

Signed On-

18 May 2018