The Central Electricity Regulatory Commission (CERC) has fixed the normative cost of solar photo voltaic plants at Rs 80 million per MW of installed capacity for 2013-14. Previously the cost was set at Rs 100 million, highlighting a 20 per cent cost reduction.
The CERC has cited the falling prices of PV modules as a factor in the change. This change in price could lead to a reduction in REC floor prices, and may have negative consequences for the REC market and solar project developers.
The CERC’s norm can be expected to be taken as the reference cost of solar plants in the meeting of the investors to be held in Tamil Nadu on 23 November and the State’s electricity generation and distribution utility, Tangedco.
The Commission is also looking to finalise the cost per MW of solar thermal plants at Rs 120 million. In calculating the normative cost of solar PV as Rs 80 million/ MW and solar thermal at Rs 120 million/ MW, CERC has decreased the cost by Rs 20 million/ MW for solar PV and Rs 10 million for solar thermal over its normative cost for the year 2012-13.
The CERC’s normative cost is generally taken as the benchmark by developers and often forms the basis for tariff negotiations.