Green Tariff in India

Green Tariff in India

India will issue draft guidelines in a fortnight to enable power distribution companies to offer renewable energy to large consumers at a separate green tariff, a weighted average of the utilities’ cost of procurement of green energy, power and renewable energy
India is running the world’s largest clean energy programme to achieve 175 gigawatt (GW) of renewable capacity, including 100 GW of solar power by 2022.

Union Government is working on a ‘Green Tariff Policy’ with the objective of reinforcing India’s green energy credentials.



Green Tariff Policy will help electricity distribution companies (DISCOMs) supply electricity generated from clean energy projects at a cheaper rate as compared to power from conventional fuel sources such as coal.

Large corporate who are looking to procure only green power, they can contract such power from a clean energy developer as it is done in commercial and industrial (C&I) segment.

Once the policy is finalised, DISCOMs can exclusively buy green electricity and supply it at ‘green tariff’.

Green Tariff will be the weighted average tariff of green energy that consumer will have to pay.

The tariff will be slightly lower than tariff from conventional fuel sources and a new regulation will help to ensure, if an industry wants only green power from developer, open access applications will be approved within a fortnight.

A provision for a separate green tariff is also seen to reduce the hesitation of discoms in going for power purchase from RE sources, as this mechanism will not impact general tariffs. In order to manage the infirm nature of RE power, discoms have to make alternative arrangements to procure balancing electricity for stabilising the grid. The cost of balancing renewables has been estimated to be in the range of 1.10/unit by Central Electricity Authority.


MERC has approved Green Tariff for consumers of all distribution licensee of Maharashtra


In a recent order, The Maharashtra Electricity Regulatory Commission(MERC) has allowed a ‘Green Power Tariff’ for the consumers opting for 100% Green energy. 

All consumers including Extra High Voltage, High Voltage and Low Voltage will be eligible for opting 100% RE power on payment of Green Power Tariff. As per the order, Green Power Tariff of Rs 0.66/ kWh, which is over and above the normal tariff of the respective category as per Tariff Orders, will be levied to such consumers.

The Commission also ruled that if the consumer were not an obligated entity under RPO Regulations, it would be appropriate to count this energy towards RPO fulfilment of Distribution Licensee which will reduce the additional cost of the utility for purchasing the same and ultimately benefit its consumers.

Nikhil Samundre, founder of Solarmarts believes that it’s high time for each one of us to switch to green energy. This is essential for the sustainability of resources for our future generation. However, these hurdles should not be stones in the path to our success forever. The government’s plan to develop introduce green tariff policy will serve the purpose and work in an organized manner with a dedication to supply green energy to every house.

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