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HPERC Approves Rs0.05/kWh Royalty Pass-Through for Solar Projects Over 1 MW
Oct 19, 2025
The Himachal Pradesh Electricity Regulatory Commission (HPERC) has allowed the pass-through of a Rs 0.05 (~$0.00057)/kWh royalty on all solar power projects above 1 MW capacity.
Under the order, the Himachal Pradesh State Electricity Board Limited (HPSEBL) will collect the royalty from project generation and remit it to the state government in addition to the approved tariff. The royalty amount can be included in the cost of supply and reflected in consumer tariffs.
The decision follows a state government notification issued in September 2023, mandating a tariff-based royalty on solar projects above 1 MW to fund public welfare initiatives, environmental restoration, and local development programs.
HPERC clarified that while most new power purchase approvals already include this clause, a few earlier ones had omitted it due to clerical oversight. To ensure consistency, the Commission initiated suo motu proceedings and formally incorporated the royalty clause in all applicable approvals.
A consumer representative had opposed the levy, arguing it would increase electricity costs since all power generated by solar developers in Himachal Pradesh is supplied to the state grid. However, HPSEBL supported the provision, noting that it was a statutory obligation arising from the state’s notification and therefore should qualify for pass-through treatment.
After review, HPERC ruled that the royalty amount was minimal and served a broader public interest, including protection of low-income consumers and funding of welfare schemes. The Commission also clarified that the royalty does not financially impact project developers, as it is collected over and above their approved tariff.
The order applies to multiple projects, including MVD Solar Power Project, Shree Rudra Green Solar Power Project, Samurja Shakti, and others.
Earlier this year, HPERC had fixed a levelized tariff of Rs 3.45/kWh for solar projects up to 1 MW and Rs 3.38/kWh for those between 1 MW and 3 MW for FY 2025–26.