India: Retroactive solar cut rejected

In a dynamic that has played out in various parts of world like Spain, Greece and Australia, retroactive cuts to solar FITs or PPAs have been considered in the Indian state of Gujarat. But in a positive sign for the photovoltaic project integrators and owners, the Gujarat Electricity Regulatory Commission (GERC) has dismissed state government moves to cut the rates retroactively.

Gujarat is India’s leading province in terms of solar installations, with almost 1 GW of installed capacity, across 88 projects. Contracts signed in 2010 were to lock in rates for 25 years.

However last month, Gujarat Urja Vikas Nigam (GUVN), the state off-taker of the power, applied for payments to be cut. According to reporting from RechargeNews, GUVN had said that the rates where too high, as developers had overstated the installed costs of photovoltaics. The utility had applied for the rate to be cut from around 12.54 rupees/kWh to 9 rupees/kWh (US$0.14).

Bloomberg reports that electricity regulator (GERC) has ruled that parties to the contracts signed are not able to alter the terms. GERC determined that such a petition would have to been issued within 60 days of the order the FITs and that PPAs are not be reopened.

The Bloomberg continues that the proposal to cut the rate had been objected to by companies such as Moser Baer India, Esser Energy, Tata Power and Welspun Energy.