Maharashtra Discom To Get Solar Energy At Rs 3.30/Unit Under Rural Solar Scheme

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Under the scheme, farmers can lease their land to setup solar panels. Photo by-Manish Kumar/Saur Energy

The Maharashtra State Electricity Distribution Company Limited (MSEDCL) is now all set to procure 150 Megawatt (MW) of solar power on a long-term basis under the Mukhyamantri Saur Krishi Vahini Yojana (MSKVY) at the rate of Rs 3.30 per unit. 

The Maharashtra Electricity Regulatory Commission (MERC) also approved these rates recently. The scheme allows farmers or a group to lease their land for solar production. Delhi-based National Federation of Farmers, Procurement Processing and Retailing Cooperative of India Ltd recently won the tender issued by the discom. It has agreed to supply solar power under the scheme at Rs 3.30 per unit. The company earlier had also won bids under a similar central government scheme-PM-KUSUM. 

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However, the price was discovered through a thorough and lengthy process that MSEDCL underwent. The MERC, earlier in 2020, had approved the ceiling rate of Rs 3.30 per unit for such decentralized projects under the scheme. Soon, MSEDCL also issued tenders and tried to get developers who could bid with a ceiling price of Rs 3.10 per unit. However, it didn’t get ample bids.

The rise of GST rates, surging dollar-rupees exchange rates, and imposition of hiked Basic Customs Duty (BCD) led to poor response to such tenders. To counter this, MSEDCL again issued a tender for 52 MW without giving any ceiling price. The discom under this tender received only two tenders who quoted their prices from Rs 4/unit to Rs 4.10/unit. With these higher prices, the MSEDCL again floated a tender with a ceiling price of Rs 3.30/unit for 230MW.

As a last resort, MSEDCL got only a single tender who bid at Rs 3.30/unit. Finally, after all, concerned scrutiny, the bidder- Federation of Farmers Procurement Processing and Retailing Cooperative of India Ltd was found technically fit for the project. Now, with the MERC approving the tariff as decided by the MSEDCL, the discom is all set to get solar power on a long-term basis under the state rural solar scheme at this rate. 

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Under the state scheme, any farmer or group of farmers with land between 3 acres to 50 acres can set up solar panels, sell the solar energy to the local discoms and become prosumers. It applies to those patches of farmers’ land up to 5 kilometers from the local substation. The rates discovered under the scheme are cheaper than several fossil-fuel-based energy tariffs and thus have opened up avenues for using renewable energy from such schemes. 

This procurement of solar energy by MSEDCL will also help the discom to fulfill its Renewable Purchase Obligations (RPO) targets, the MERC said in its latest order on the issue. Under the program, the Maharashtra government has planned to generate 7,000 MW of solar energy the state. This includes setting up of agricultural pumps and solar panels in farmers’ land by taking it on lease. With this, the state will looking at an investment of Rs 30,000 crore in the power generation sector.