APTEL Upholds Solar Producer's Tariff Claim, Overturns Lower Ruling

In a significant ruling for the renewable energy sector, the Appellate Tribunal for Electricity (APTEL) has passed a ruling in favour of G.R. Enterprises, a solar power producer, in a tariff dispute against the Himachal Pradesh State Electricity Board Ltd. (HPSEBL).

The tribunal overturned an earlier order by the Himachal Pradesh Electricity Regulatory Commission (HPERC) and directed HPSEBL to pay G.R. Enterprises the higher tariff of INR 5.31/kWh for their 1 MW solar photovoltaic project.

It may be mentioned that a dispute has arisen over the tariff for G.R. Enterprises' 1 MW solar project in Bhogpur, Himachal Pradesh, commissioned on March 30, 2018, a day before the deadline stipulated in their Power Purchase Agreement (PPA) with HPSEBL. The PPA promised a tariff of INR 5.31/kWh if the project was commissioned by March 31, 2018. While the company achieved grid synchronisation on March 30th, HPSEBL argued that the project wasn't fully commissioned until after the deadline and paid a lower tariff of INR 4.37/kWh.

G.R. Enterprises argued that synchronisation with the grid constituted commissioning for solar projects, especially as all pre-commissioning tests were completed before March 30th. They emphasised that no post-synchronisation tests were required according to industry standards and the Solar Energy Corporation of India (SECI) guidelines. HPSEBL, however, maintained that the PPA clearly distinguished between synchronisation and commissioning, citing commissioning tests conducted on April 10, 2018, as the actual commissioning date.

The tribunal examined the PPA, industry practices, and the evidence presented. They concluded that the PPA, while differentiating between synchronisation and commissioning, did not explicitly define the commissioning date. Crucially, they acknowledged that industry standards, including SECI guidelines, consider a solar project commissioned when energy begins flowing into the grid—aligning with G.R. Enterprises' argument. The tribunal also noted that the Independent Engineer's certificate, issued on April 10th, confirmed the plant's readiness for commercial operation but didn't mention commissioning, suggesting that commissioning had already taken place.

Finally, APTEL ruled that G.R. Enterprises' project was indeed commissioned on March 30, 2018, making them eligible for the higher tariff of INR 5.31/kWh. HPSEBL has been directed to pay the differential tariff within three months, along with applicable carrying costs.

This judgement is significant for the renewable energy sector. It clarifies the interpretation of commissioning timelines for solar projects and emphasises the importance of aligning contractual terms with the specific technical aspects of renewable energy technologies.The tribunal's decision highlights the need for regulatory bodies to consider industry best practices and standards when interpreting PPAs, particularly for evolving technologies like solar power.