1st-year and Levelised Tariff – Solar PV (Illustrative)
This interactive model is provided for illustrative purposes only. It is intended to support conceptual understanding of tariff formation and cost sensitivities, not regulatory or commercial tariff determination.
We have adopted a cost-based analytical framework broadly aligned with the methodology earlier used by the Central Electricity Regulatory Commission (CERC) for determining levelised tariffs for solar photovoltaic projects.
While solar tariffs in India are now largely discovered through competitive bidding, such cost-based structures remain useful for sensitivity analysis, scenario exploration, and for understanding how underlying assumptions translate into levelised generation costs.
This model is presented as an illustrative analytical tool, intended to support conceptual understanding rather than regulatory or commercial tariff determination.
Parameters kept fixed in the model
To maintain analytical clarity and comparability across scenarios, a limited set of structural parameters are kept fixed in this model.
- Life of the plant is kept fixed at 25 years
- Depreciation rate is fixed at 5.83% for the first 12 years and 1.54% thereafter, corresponding to an assumed residual value of 10% at the end of plant life.
- Loan repayment is assumed to be aligned with depreciation, with no moratorium period.