Bengaluru: Thousands of rooftop solar owners in Karnataka could face lower returns on future installations if Karnataka Electricity Regulatory Commission (KERC) proceeds with its proposal to reduce solar tariffs for projects commissioned between July 2026 and June 2029. In a draft notification, KERC has proposed a significant reduction in tariffs paid for electricity generated from rooftop solar systems, citing a sharp decline in the cost of solar equipment and installation.For domestic consumers installing rooftop solar systems of up to 10 kW, the tariff has been proposed at Rs 3.03 per unit, down from the current Rs 3.86 — a reduction of nearly 22%. For non-domestic distributed solar projects, the tariff is proposed to be cut from Rs 3.08 per unit to Rs 2.37.According to KERC officials, the benchmark cost of solar panels and associated equipment has declined considerably, making rooftop solar projects cheaper to set up. The commission has, however, retained special support for households installing rooftop solar systems under the Centre’s PM Surya Ghar scheme. Consumers availing capital subsidies under the programme will continue to receive separate tariffs ranging from Rs 1.87 to Rs 2.49 per unit, depending on system capacity.Energy sector experts say the proposal presents both opportunities and challenges for consumers. “While the tariff is lower, the cost of installing a rooftop solar system has also come down. The real impact will depend on whether the reduction in project costs offsets the lower tariff earnings,” said a Bengaluru-based renewable energy consultant. Another power policy analyst warned that many prospective rooftop solar owners could see diminished returns if the proposed tariff reduction is implemented.Ground-mounted solar projects also affectedKERC has also proposed reducing tariffs for ground-mounted, utility-scale solar projects. The tariff for projects commissioned between July 2026 and June 2029 has been proposed at Rs 2.65 per unit, compared to the current Rs 3.07 per unit, a reduction of 42 paise per unit. Noting that smaller consumers, particularly households, have shown limited interest in adopting distributed solar photovoltaic (DSPV) systems, KERC has proposed differential capital costs and tariffs for domestic DSPV projects ranging from 1kW to 10kW.The commission has estimated the capital cost for these systems at Rs 35,000 per kW, inclusive of taxes, duties, GST and additional premiums, higher than the benchmark cost considered for larger distributed solar projects. Despite this, the tariff for systems up to 10kW has been proposed at Rs 3.03 per unit, compared to Rs 3.86 per unit approved for 2025-26. For systems above 10kW, the tariff is proposed at Rs 2.37 per unit, down from Rs 3.08 per unit.While industry representatives say the proposals reflect the maturation of Karnataka’s solar market, consumer groups fear they could discourage investments in rooftop solar systems at a time when the state is seeking to expand distributed renewable energy generation. The final tariff order will be issued after KERC completes public consultation process.
