Karnataka’s New Solar Tariffs Are Here – KERC Rolls Out Fresh FY2026 Rates and Metering Model

The Karnataka Electricity Regulatory Commission (KERC) has released a discussion paper outlining proposed tariffs and regulations for solar power projects in FY2026. The proposals cover both utility-scale ground-mounted solar and rooftop solar PV (SRTPV) systems.

As the demand for clean and sustainable energy continues to grow, KERC aims to strengthen the regulatory framework to support solar adoption across the state. The discussion paper draws authority from the Electricity Act of 2003, which empowers state regulators to promote renewable energy and set tariff guidelines.

In June 2024, KERC had issued the FY2025 solar tariff order, applicable from April 1, 2024, to March 31, 2025. These tariffs, fixed for the 25-year life of the projects, varied for systems with and without battery energy storage (BESS), and included special rates for residential consumers and projects under the PM Surya Ghar: Muft Bijli Yojana scheme.

Karnataka currently has 9,153.86 MW of solar capacity installed through power purchase agreements, including both ground-mounted and rooftop systems. However, rooftop solar uptake remains slow, with just 686.04 MW installed as of December 2024.

The discussion paper identifies key barriers to rooftop solar adoption, such as high upfront costs, limited financing options, grid stability concerns, lack of consumer awareness, and space constraints in urban areas.

To address these challenges, KERC has introduced supportive measures, including:

• Allowing rooftop systems up to 100% of sanctioned load

• Permitting installations on government buildings

• Enabling gross metering models

• Establishing quality standards for solar equipment

The paper also proposes innovative models like Virtual Net Metering (VNM) and Group Net Metering (GNM) to boost accessibility and appeal of distributed solar:

• VNM allows solar generation to be shared across multiple connections of a single user.

• GNM enables a group of consumers to collectively benefit from a single solar system across different premises.

The proposed FY2026 tariff structure is based on detailed analysis of financial and operational factors, including plant life, capital cost, capacity utilization, O&M expenses, financing assumptions, and returns.

KERC is inviting public comments on the discussion paper to shape a more inclusive and forward-looking solar energy policy for Karnataka.