Andhra Pradesh solar units face under-recovery of Rs 5,000 crore — Know who’s responsible

Solar and wind power plants in Andhra Pradesh, with aggregate capacity of 8,000 mega watt (MW), have claimed that their under-recovery owing to inadequate tariff payments by the state discoms have reached a staggering Rs 5,000 crore. What has caused the crisis is the state government’s decision to retrospectively amend the power purchase pacts, citing malpractices.

As per Andhra Pradesh High Court’s September 2019 order, the state-owned power distribution companies (discoms) are paying these plants at a provisional rate of Rs 2.43/unit, against the Rs 4.84/unit tariff approved by the state power regulator earlier under the previous state government, leading to the financial stress of the renewable power producers. To add to their woes, the state government is amending its solar and wind power policies, effectively withdrawing the incentives which were offered to these plants earlier to promote renewable energy in the state.