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					</table>The Telangana Electricity Regulatory Commission (<a href="https://www.tgerc.telangana.gov.in/" target="_blank" rel="noopener">TGERC</a>) has rejected distribution companies’ (DISCOMs) proposal to reduce the ₹3.13 (~$0.033)/kWh pre-fixed levelized tariff for solar projects under Component-A of the PM-KUSUM program to ₹2.98 (~$0.031)/kWh following a reduction in goods and services tax (GST).
However, the Commission recognized the reduction in GST on renewable energy devices from 12% to 5% as a change-in-law event and allowed a project-specific adjustment of up to ₹0.06 (~$0.0006)/kWh.
The applicable tariff for individual solar power generators will, therefore, range between ₹3.07 (~$0.032)/kWh and ₹3.13 (~$0.033)/kWh.
Background
Southern Power Distribution Company of Telangana and Northern Power Distribution Company of Telangana sought a tariff revision following the GST reduction.
TGERC had determined the ₹3.13 (~$0.033)/kWh tariff in January 2021 for decentralized ground-mounted grid-connected renewable energy projects of 500 kW to 2 MW under Component-A of PM-KUSUM.
The Ministry of New and Renewable Energy approved 4 GW of capacity to Telangana under Component-A in June 2024. In April 2025, TGERC approved the procurement of the capacity and retained the ₹3.13 (~$0.033)/kWh tariff.
The GST rate on the goods component of renewable energy projects was reduced from 12% to 5%, effective September 22, 2025. Under the applicable 70:30 goods-services valuation mechanism, the effective composite GST incidence declined from 13.8% to 8.9%.
The DISCOMs subsequently proposed reducing the tariff to ₹2.98 (~$0.031)/kWh, arguing that the GST reduction lowered project capital costs.
Commission’s Analysis
TGERC held that the GST reduction constituted a change in law under the power purchase agreements (PPAs) as it occurred after the relevant contractual cut-off date.
However, it said the change-in-law provision did not permit the DISCOMs to substitute the contracted tariff with a new tariff.
The Commission said the financial impact of the tax change can instead be addressed through supplementary billing and reconciliation.
Substituting the lower capital cost into the original tariff calculation resulted in a levelized tariff of ₹3.0082 (~$0.031)/kWh compared with ₹3.1261 (~$0.033)/kWh, representing an impact of ₹0.1179 (~$0.0012)/kWh, rounded to ₹0.12 (~$0.0013)/kWh, the Commission noted.
Noting that the PPAs states that the financial impact of a change in law must be shared equally between the generator and the licensee; the Commission capped the benefit transferable to the DISCOMs at ₹0.06 (~$0.0006)/kWh.
The adjustment will apply only to normative generation of 1.652 million kWh/MW annually. Generation exceeding this level will be paid ₹3.13 (~$0.033)/kWh without the adjustment, subject to the PPA provisions governing excess generation.
The Commission ruled that generators must submit their goods invoices and supporting documents within 90 days of the order or 90 days from the commercial operation date, whichever is later. The DISCOMs must verify the documents and communicate the applicable tariff within 60 days.
TGERC also directed the DISCOMs to reflect the aggregate benefit from the adjustment in their aggregate revenue requirement and true-up filings so that the benefit is passed on to consumers.
The Commission ruled that future power procurement under PM KUSUM and related expressions of interest, application notices, or letters of award must be approved by the Commission.
The Ministry of New and Renewable Energy recently <a href="https://www.mercomindia.com/mnre-extends-financial-closure-deadline-for-pm-kusum-projects" target="_blank" rel="noopener">extended</a> the deadline for eligible projects under Components A and C of the PM KUSUM program to achieve financial closure by November 30, 2026.
Subscribe to Mercom’s real-time <a href="https://www.mercomindia.com/product/mercoms-renewable-energy-regulatory-updates" target="_blank" rel="noopener">Regulatory Updates</a> to ensure you don’t miss any critical updates from the renewable industry.

Telangana Regulator Rejects Plea to Cut PM KUSUM Solar Tariff to ₹2.98/kWh

The Andhra Pradesh high court has stayed the notice issued by the Andhra Pradesh Electricity Regulatory Commission (APERC) for public hearings to revise solar tariffs.
The APERC was expected to hold this hearing on December 7, 2019. The state government had earlier constituted a high-level negotiation committee to review, negotiate, and bring down these prices.
The high court ordered the stay after a petition was filed by Waaneep Solar Private Limited, a special purpose vehicle (SPV) promoted through a public-private partnership between Waaree Energies and North Eastern Electric Power Corporation Limited (NEEPCO). The petition noted that these tariffs were discovered through a transparent, competitive bidding process under Section 63 of the Electricity Act 2003. According to the petition of Waaneep Solar, these tariffs cannot be revised.
The court has now decided that the case would be heard on December 19, 2019.
The ongoing dispute in Andhra Pradesh over the revision of solar and wind tariffs has set a <a href="https://mercomindia.com/andhra-pradesh-solar-wind-ppa-bad-precedent/" target="_blank" rel="noopener noreferrer">bad precedent</a> for the industry at large, besides making the developers apprehensive and hurting the investor sentiment.
<a href="https://mercomindia.com/andhra-quashes-order-solar-wind-tariff/" target="_blank" rel="noopener noreferrer">In September 2019</a>, the high court ordered that the terms of the contract have to be honored, and the state has no say in the prices as it is to be determined by law.  The court ordered that until it is determined that the price is indeed high, power <a href="https://mercomindia.com/must-run-solar-wind-andhra-high-court/" target="_blank" rel="noopener noreferrer">cannot be curtailed</a>. It ordered DISCOMs to honor the bills of wind and solar purchasers and to pay all pending and future bills at the interim rates of ₹2.44 (~$0,03404)/kWh for solar power and ₹2.43 (~$0.0339)/kWh for wind power. A timeframe of six months was also suggested to the APERC for the other batch of writ petitions to dispose of the cases.
However, despite the high court’s orders, renewable energy generators have not been paid, and the state government has filed a writ appeal against the high court’s order.
<a href="https://mercomindia.com/rk-singh-sheds-light-on-dispute-with-andhra-pradesh/" target="_blank" rel="noopener noreferrer">Recently</a>, Mercom reported that Union Power Minister R.K. Singh had shed light on the ongoing renewable energy battle between the Andhra Pradesh government and the Union Government. Singh explained that distribution companies (DISCOMs) in Andhra Pradesh have not been paying for renewable power for over a year citing high solar and wind energy purchase prices.

Andhra High Court Stays APERC’s Public Hearing to Revise Solar Tariffs

The situation in Andhra Pradesh has become a matter of concern for solar and wind project developers. The issue has escalated over the past week with renewable developers approaching the high court for respite. However, to make matters worse, the state has now begun severely curtailing wind power.
When contacted, a wind project developer confirmed the development to Mercom adding, “Currently, during peak hours, 90-100% curtailment is happening, and on average daily, they are curtailing 60-70%. Even though the renewables have &#8216;Must-Run&#8217; status, all the independent power producers are facing the same issue. This is a critical condition, this being the windy season.”
Another wind power generator informed Mercom, “Curtailment is happening. Yesterday, it was 70-90% from 12.45 pm to 9.45 pm, and today, the same pattern continues with 80% curtailment from 8.45 am. The Chief Minister&#8217;s dashboard, where all the developers update their real-time generation data has been suddenly stopped.
Through market research, Mercom also found out that from Thursday, the thermal power projects which generate 1,200-1,500 MW have been scaled to 3,500 MW. Three thermal projects in the Rayalseema region have been restarted since Thursday. The reason given by the state DISCOMs is that they are curtailing for grid stability. However, the real reason is shifting generation from wind to coal.
Moreover, several other wind energy generators in Andhra Pradesh have claimed that they received calls from the state DISCOM asking to shut down wind power production. However,  they did not do it and asked for the order in writing, which was not provided.
“This is unconstitutional,” remarked another wind project developer. “The state cannot do this as this will jeopardize billions in investment and is against the process that is being undertaken in the High Court to resolve the issue of revision of PPAs. We understand that the state DISCOM has debts, but that doesn’t mean must-run sources must be asked to shut down.
<a href="https://mercomindia.com/andhra-court-stay-order-solar-wind-tariffs/" target="_blank" rel="noopener noreferrer">Recently</a>, the Amaravathi High Court imposed a stay order on the implementation of the state DISCOM’s letter seeking a revision in the power purchase agreement for the solar PV and wind projects. The stay will be in place until August 22, 2019, after which the court will hear the matter.
The development comes on the heels of the state’s new chief minister Jaganmohan Reddy’s newly-formed <a href="https://mercomindia.com/mnre-andhra-pradesh-committee-solar-wind-ppa/" target="_blank" rel="noopener noreferrer">committee</a> to deliberate and brings down the costs in all the high-priced Power Purchase Agreements for wind and solar power projects signed during the term of the previous Chandrababu Naidu-led government, alleging corruption.
Several developers we spoke with felt that the state is making this move to demotivate the wind developers while they are trying to renegotiate PPAs. Developers think that the state will continue to pressure them through curtailment until the issue is resolved in the courts.

After High Court’s Stay, Andhra Pradesh Begins Curtailing Wind Power Severely

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