Annexure VII Final Rec

8/2/2019 Annexure VII Final Rec

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TARIFF DETERMINATION FOR SOLAR PHOTO VOLTAIC POWER PLANTS LOCATED IN RAJASTHAN

25 yrs Levelised Tariff (Rs/kWh) 6.96

Accelerated Depreciation(Rs/kWh) 0.87

S. No.Assumption

HeadSub-Head Sub-Head (2) Unit

Base Case

(SPV)

1 Power Generation

Capacity

Installed Power Generation Capacity MW 1.1

CUF % 19.00%

Deration p.a. after 2nd year % 0.70%

Auxiliary Consumption % 0.25%Tariff Period Years 25

Life of Power Plant Years 25

2 Project Cost

Capital Cost/MW inc Land,Trans &Connectivity charge Rs Lacs/M 875

Project Cost Power Plant Cost Rs Lacs 937.5

Tranmssion line Cost Rs Lacs/M 25

Connectivity Charges Rs Lacs/M 0

3 Sources of Fund

Debt: Equity

Debt % 66.00%

Equity % 34.00%

Total Debt Amount Rs Lacs 618.75

Total Equity Amout Rs Lacs 318.75

Funding Options-1 (Domestic Loan Source-1)

Loan Amount Rs Lacs 618.75

Moratorium Period years 0Repayment Period(incld Moratorium) years 10

Intrest Rate % 9.00%

Funding Options-2 ( Equity Finance )

Equity amount Rs Lacs 318.75

Return on Equity for first 10 yrs % p.a 13.00%

Return on Equity from 11th yr onwar% p.a 13.00%

Discount Rate (equiv. to WACC) 10.36%

4 Financial AssumptionsFiscal Assumptions

Income Tax % 30.90%

MAT Rate (for yr-1) % 19.93%

MAT Rate (for yr-2 to yr-10) 18.54%

80 IA benefits Yes/No Yes

Accelerated Depreciation(for 20 yearsRs/kWh 0.00

Depreciation

Depreciation Rate(upto 12-yrs) % 5.28%

Depreciation Rate(after 12-yrs) % 2.05%Years for 5.28% SLM rate years 12

5 Working Capital

For Fixed Charges

O&M Charges Months 1

Maintenance Spare (% of O&M expenses) 15.00%

Receivables for Debtors Months 1.5

Intrest On Working Capital % 8 00%

Annexure-VII

Order - Solar Tariff


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Units Generation Unit Year---> 1 2 3 4 5 6 7 8 9 10 11 12 13

Aux Consumption % 0.25% 0.25% 0.25% 0.25% 0.25% 0.25% 0.25% 0.25% 0.25% 0.25% 0.25% 0.25% 0.25% Installed Capacity MW 1.1 1.1 1.1 1.1 1.1 1.1 1.1 1.1 1.1 1.1 1.1 1.1 1.1

Deration factor % 0.70% 1 1.000 0.993 0.986 0.979 0.972 0.965 0.959 0.952 0.945 0.939 0.932 0.926

Generation MU 1.83 1.83 1.81 1.80 1.79 1.78 1.76 1.75 1.74 1.73 1.71 1.70 1.69

Cost of generation Unit Year---> 1 2 3 4 5 6 7 8 9 10 11 12 13

O&M Expenses Rs Lakh 12.25 12.65 13.08 13.54 14.04 14.57 15.15 15.76 16.42 17.12 17.87 18.76 19.71

Depreciation Rs Lakh 61.88 61.88 61.88 61.88 61.88 61.88 61.88 61.88 61.88 61.88

Interest on term loan Rs Lakh 52.90 47.33 41.77 36.20 30.63 25.06 19.49 13.92 8.35 2.78 0.00 0.00 0.00

Return on Equity Rs Lakh 41.44 41.44 41.44 41.44 41.44 41.44 41.44 41.44 41.44 41.44 41.44 41.44 41.44Total Cost of generation Rs Lakh 168.47 163.30 158.16 153.05 147.98 142.94 137.95 132.99 128.08 123.22 59.31 60.20 61.15

Per unit Cost of generation Rs/kWh 9.22 8.94 8.72 8.50 8.28 8.05 7.82 7.60 7.37 7.14 3.46 3.54 3.62

Levellised cost of generation (Rs/kWh) (25 yrs) 6.96

Calculations showing the admissible gains of accelerated depreciation under Income Tax Act for solar PV power plants

First Year 33.22%

Capital cost Rs 100.00 Discount Rate 13.73% Income Ta 30.90% Accelerate 80.00% CUF

thereafter

Year--> 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

Depreciation-Normative 5.28 5.28 5.28 5.28 5.28 5.28 5.28 5.28 5.28 5.28 5.28 5.28 2.05 2.05 2.05

Depreciation-Accelerated 80.00 10.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Depreciation difference admissible for claiming

benefit 74.72 4.72 (5.28) (5.28) (5.28) (5.28) (5.28) (5.28) (5.28) (5.28) (5.28) (5.28) (2.05) (2.05) (2.05)

Effective Income Tax Rate 33.22% 30.90% 30.90% 30.90% 30.90% 30.90% 30.90% 30.90% 30.90% 30.90% 30.90% 30.90% 30.90% 30.90% 30.90%

Income Tax gain 24.82 1.53 (1.67) (1.63) (1.63) (1.63) (1.63) (1.63) (1.63) (1.63) (1.63) (1.63) (0.63) (0.63) (0.63)

Discount Factor 1.00 0.91 0.82 0.74 0.67 0.61 0.55 0.50 0.45 0.41 0.37 0.34 0.31 0.28 0.25

Discounted Tax gain 24.82 1.39 (1.37) (1.21) (1.10) (1.00) (0.90) (0.82) (0.74) (0.67) (0.61) (0.55) (0.19) (0.18) (0.16)

Levelized ITAX gain 1.76

Solar generation MU 1.83 1.83 1.81 1.80 1.79 1.78 1.76 1.75 1.74 1.73 1.71 1.70 1.69 1.68 1.67

Solar PV

CUF 19.00%

Capital cost (Rs in Lakhs/MW) 875.00

Levelized ITAX benefit ,Rs Lakh 15.37

Levelized generation,LU 17.58

Levelised ITAX benefit in Rs/kWh 0.87


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TARIFF DETERMINATION FOR SOLAR PHOTO VOLTAIC

Units Generation Unit

Aux Consumption %Installed Capacity MW

Deration factor %

Generation MU

Cost of generation Unit

O&M Expenses Rs Lakh

Depreciation Rs Lakh

Interest on term loan Rs Lakh

Return on Equity Rs LakhTotal Cost of generation Rs Lakh

Per unit Cost of generation Rs/kWh

Levellised cost of generation (Rs/kWh) (25 yrs) 6.96

Calculations showing the admissible gains of accelerated depreci

Capital cost Rs 100.00

Year--> 1

Depreciation-Normative 5.28

Depreciation-Accelerated 80.00

Depreciation difference admissible for claiming

benefit 74.72

Effective Income Tax Rate 33.22%

Income Tax gain 24.82

Discount Factor 1.00

Discounted Tax gain 24.82


Solar generation MU 1.83

Solar PV

CUF 19.00%

Capital cost (Rs in Lakhs/MW) 875.00

Levelized ITAX benefit ,Rs Lakh 15.37

Levelized generation,LU 17.58

Levelised ITAX benefit in Rs/kWh 0.87

25

0.25%1.1

0.851

1.55

25

36.62

0.00

41.4478.06

5.02


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Operation and Maintenance Expenses

Particular Unit Year---> 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

O&M expense for power Rs Lakh 9.51 10.06 10.63 11.24 11.89 12.57 13.28 14.04 14.85 15.70 16.59 17.54 18.55 19.61 20.73 21.92

Insurance Charges Rs Lakh 2.74 2.59 2.45 2.30 2.15 2.01 1.86 1.71 1.57 1.42 1.28 1.22 1.16 1.10 1.05 0.99

Total O&M expense Rs Lakh 12.25 12.65 13.08 13.54 14.04 14.57 15.15 15.76 16.42 17.12 17.87 18.76 19.71 20.71 21.78 22.90

Particulars Unit Year---> 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

Opening balance Rs Lakh 913 863.81 815.12 766.42 717.73 669.04 620.35 571.65 522.96 474.27 425.58 406.37 387.15 367.74 348.33 328.92

Depreciation Rs Lakh 48.69 48.69 48.69 48.69 48.69 48.69 48.69 48.69 48.69 48.69 19.21 19.21 19.41 19.41 19.41 19.41

Closing balance Rs Lakh 863.81 815.12 766.42 717.73 669.04 620.35 571.65 522.96 474.27 425.58 406.37 387.15 367.74 348.33 328.92 309.51


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Particular Unit Description

Power Plant Cost Rs Lakh 913

Life of Plant Years 25

Years -----------------> Unit 1 2 3 4 5 6 7 8 9 10

Depreciation for power plant Rs Lakh 48.18 48.18 48.18 48.18 48.18 48.18 48.18 48.18 48.18 48.18

Total Depreciation Rs Lakh 48.69 48.69 48.69 48.69 48.69 48.69 48.69 48.69 48.69 48.69


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TARIFF DETERMINATION FOR SOLAR PHOTO VOL

Particular Unit

Power Plant Cost Rs Lakh

Life of Plant Years

Years -----------------> Unit

Depreciation for power plant Rs Lakh

Total Depreciation Rs Lakh

11 12 13 14 15 16 17 18 19 20

18.70 18.70 18.70 18.70 18.70 18.70 18.70 18.70 18.70 18.70

19.21 19.21 19.41 19.41 19.41 19.41 19.41 19.41 19.41 19.41


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Long-Term Debt Schedule

Particular Unit Year---> 1 2 3 4 5 6 7 8 9 10 11 12

Opening Balanc Rs Lakh 618.75 557 495 433 371 309 248 186 124 62 0 0

Repayment Rs Lakh 61.88 61.88 61.88 61.88 61.88 61.88 61.88 61.88 61.88 61.88 0.00 0.00

Closing Balance Rs Lakh 557 495 433 371 309 248 186 124 62 0.0 0 0

Interest Rs Lakh 52.90 47.33 41.77 36.20 30.63 25.06 19.49 13.92 8.35 2.78 0.00 0.00

Solar_PV_aSi


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Working Captial Requirement

Particular Unit Year---> 1 2 3 4 5 6 7 8 9 10

O&M expense for power plant Rs Lakh 0.79 0.84 0.89 0.94 0.99 1.05 1.11 1.17 1.24 1.31

Receivables Rs Lakh 21.06 20.41 19.77 19.13 18.50 17.87 17.24 16.62 16.01 15.40

Maintenance Spare Rs Lakh 1.43 1.51 1.60 1.69 1.78 1.88 1.99 2.11 2.23 2.35

Total Working Capital Rs Lakh 23.28 22.76 22.25 21.75 21.27 20.80 20.34 19.90 19.47 19.06

Interest Rate % 8.00%

Interest on Working Capital Rs Lakh 1.86 1.82 1.78 1.74 1.70 1.66 1.63 1.59 1.56 1.53

Solar_PV_aSi


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TARIFF DETERMINATION FOR SOLAR PHO

Working Captial Requirement

Particular Unit

O&M expense for power plant Rs Lakh

Receivables Rs Lakh

Maintenance Spare Rs Lakh

Total Working Capital Rs Lakh

Interest Rate %

Interest on Working Capital Rs Lakh

11 12 13 14 15 16 17 18 19 20

1.38 1.46 1.55 1.63 1.73 1.83 1.93 2.04 2.16 2.28

7.41 7.53 7.64 7.77 7.90 8.04 8.19 8.35 8.52 8.70

2.49 2.63 2.78 2.94 3.11 3.29 3.48 3.67 3.88 4.11

11.29 11.62 11.97 12.34 12.74 13.16 13.60 14.07 14.56 15.08

0.90 0.93 0.96 0.99 1.02 1.05 1.09 1.13 1.16 1.21

Solar_PV_aSi


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Return on Equity

Praticular Unit Year---> 1 2 3 4 5 6 7 8 9 10 11 12 13 14

Pre-tax ROE Rs Lakh 41.44 41.44 41.44 41.44 41.44 41.44 41.44 41.44 41.44 41.44 41.44 41.44 41.44 41

Income tax component for Gross up Rs Lakh 10.31 9.43 9.43 9.43 9.43 9.43 9.43 9.43 9.43 9.43 18.53 18.53 18.53 18

ROE (Grossed up for I.Tax) Rs Lakh 51.75 50.87 50.87 50.87 50.87 50.87 50.87 50.87 50.87 50.87 59.97 59.97 59.97 59

1 2 3 4 5 6 7 8 9 10 11 12 13 14

CC 1600 1600 1600 1600 1600 1600 1600 1600 1600 1600 1600 1600 1600 16

roe 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 1

tax rate 19.93% 18.54% 18.54% 18.54% 18.54% 18.54% 18.54% 18.54% 18.54% 18.54% 30.90% 30.90% 30.90% 30.9

grossed up 16.24% 15.96% 15.96% 15.96% 15.96% 15.96% 15.96% 15.96% 15.96% 15.96% 18.81% 18.81% 18.81% 18.8

ROE 77.932 76.602 76.602 76.602 76.602 76.602 76.602 76.602 76.602 76.602 90.304 90.304 90.30391 90.303

62.4 62.4 62.4 62.4 62.4 62.4 62.4 62.4 62.4 62.4 62.4 62.4 62.4 6

15.532 14.202 14.202 14.202 14.202 14.202 14.202 14.202 14.202 14.202 27.904 27.904 27.90391 27.903


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Annexure-VIIContd.

Calculations showing the admissible gains of accelerated depreciation under Income Tax Act for solar PV power plants

Capital cost Rs/MW 100 Discount Rate ###### Income Tax rate@ Accelerated depreciation 80% CUF 19.00% Aux 0.25%

Year--> 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Depreciation-Normative 5.28 5.28 5.28 5.28 5.28 5.28 5.28 5.28 5.28 5.28 5.28 5.28 2.05 2.05 2.05 2.05 2.05 2.05 2.05 2.05

Depreciation-Accelerated 80.00 10.00 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Depreciation difference

admissible for claiming 74.72 4.72 (5.28) (5.28) (5.28) (5.28) (5.28) (5.28) (5.28) (5.28) (5.28) (5.28) (2.05) (2.05) (2.05) (2.05) (2.05) (2.05) (2.05) (2.05)

Effective Income Tax Rate 33.22% 32.45% 31.67% 30.90% 30.90% 30.90% 30.90% 30.90% 30.90% 30.90% 30.90% 30.90% 30.90% 30.90% 30.90% 30.90% 30.90% 30.90% 30.90% 30.90%

Income Tax gain 24.82 1.53 (1.67) (1.63) (1.63) (1.63) (1.63) (1.63) (1.63) (1.63) (1.63) (1.63) (0.63) (0.63) (0.63) (0.63) (0.63) (0.63) (0.63) (0.63)

Discount Factor 1.00 0.91 0.82 0.74 0.67 0.61 0.55 0.50 0.45 0.41 0.37 0.34 0.31 0.28 0.25 0.23 0.21 0.19 0.17 0.15

Discounted Tax gain 24.82 1.39 (1.37) (1.21) (1.10) (1.00) (0.90) (0.82) (0.74) (0.67) (0.61) (0.55) (0.19) (0.18) (0.16) (0.14) (0.13) (0.12) (0.11) (0.10)


Solar generation MU 1.83 1.83 1.81 1.80 1.79 1.78 1.76 1.75 1.74 1.73 1.71 1.70 1.69 1.68 1.67 1.66 1.64 1.63 1.62 1.61

Solar PV

CUF 19.00%

Capital cost (Rs in 875.00

Levelized ITAX benefit ,Rs 15.37

Levelized generation,LU17.58

Levelised ITAX benefit in

Rs/kWh0.87

Annexure VII Final Rec

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