CERC Slashes SECI Tariff Claim For Chhattisgarh Solar+BESS Project

The Central Electricity Regulatory Commission (CERC) has pruned Solar Energy Corporation of India’s (SECI) tariff expectations for its flagship solar-plus-storage project in Chhattisgarh. The central power regulator in its latest order, approved a levelised rate of Rs 4.01 per unit for this project. This is lower than SECI’s revised claim of Rs 4.22 per unit and well below its initial demand of Rs 4.27.

At the centre of the dispute is a 100 MW solar power project coupled with a 40 MW/120 MWh battery energy storage system (BESS) at Rajnandgaon. It was commissioned in February 2024. The project is among the first of its scale in the country to integrate storage, designed to smooth out supply and enhance grid reliability.

SECI Sought Tariff Approval 

SECI had approached the regulator seeking approval for a project-specific tariff, arguing that changes in tax policy and project scope had pushed up costs. It cited a sharp increase in Goods & Services Tax (GST) on renewable energy devices—from 5% to 12%—and land-related revisions that added to the engineering and construction bill. These, SECI said, justified a tariff hike above the Rs 4 ceiling agreed in its power purchase agreement with Chhattisgarh State Power Distribution Company Ltd (CSPDCL).

The discom pushed back hard. Chhattisgarh State Power Distribution Company Limited (CSPDCL) argued that SECI had overstated its financing costs, pointing out that the company had accessed low-cost loans from the World Bank at rates closer to 6%, instead of the 10%-plus claimed. It also questioned delays in commissioning and resisted additional charges such as foreign exchange variation and equipment costs, saying these should not be passed on to consumers.

CERC Backs Discom's Claims 

After a detailed review, CERC sided with the discom on several counts. It reworked the project’s capital cost to Rs 8,681 crore, applied a normative debt-equity ratio, and pegged the interest rate at a weighted average of 6.15% to reflect the concessional funding. At the same time, it acknowledged the project’s higher efficiency parameters, approving SECI’s claimed 27.8% capacity utilisation factor and 1.14% auxiliary consumption, citing the role of the battery system.

The Commission also factored in battery replacement costs and storage efficiency but disallowed several of SECI’s additional claims, including extra manpower and monitoring expenses. On GST and land costs, CERC noted that these were already accounted for in the overall tariff calculation.

CERC Order

The outcome is a tariff of Rs 4.01 per unit — lower than SECI’s ask but still reflective of the higher costs of pioneering storage-backed solar.

"Regarding the issue of the per unit tariff impacted due to a change in GST rate and land availability, the Commission would like to reiterate that the tariff computation has been worked out after taking into consideration the revised GST rate and the additional cost claimed by the Petitioner. Hence, there is no requirement to compute the per unit," the CERC order said.

It also added, "Accordingly, as against the Petitioner’s claim of Rs. 4.71 per kWh and the sought 
tariff of Rs. 4.22 per kWh, the Commission approves the levelized tariff of Rs . 4.01 per kWh (including the claim under change in law and on account of additional work due to revision in land area)."