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RE Tariff and Financial Analysis Tool Version 2

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Author(s): Srihari Dukkipati, Shweta Kulkarni, Ashwin Gambhir Publication Date: September, 2014

Electricity Regulatory Commissions in India determine feed-in-tariffs for different renewable energy technologies. In addition to feed-in-tariffs, renewable energy certificates (RECs) is another regulatory mechanism for deployment of renewables - essentially to overcome geographical resource availability. Apart from these, off-grid systems are deployed in areas where it is techno-economically infeasible to extend the grid.

This Excel-based tool provides a convenient way to perform tariff calculations based on Central Electricity Regulatory Commission (Terms and Conditions for Tariff determination from Renewable Energy Sources) (First Amendment) Regulations, 2014 as well as to compare costs of off-grid and grid extension projects.

The tool takes user input on up to 64 variables that are used to determine the tariff and internal rate of return (IRR) for a particular technology. In addition, the tool calculates delivered costs of off-grid and grid extension projects based on 7 inputs (without IRR as it is not applicable to off-grid projects). The tool also allows for sensitivity analysis in which the user can vary a few select inputs and observe graphically how the variation affects tariff. Default values are provided based on the technology. More information about the default values is provided later in this guide.

This tool can be used by anyone who wishes to study the financial aspects of renewable energy projects including but not limited to civil society groups, regulators, project developers, financiers and policy analysts. Some knowledge of renewable energy and financial terminology is useful to make best use of the tool.

The renewable technologies currently supported for feed-in-tariff and REC calculations are Solar Photovoltaic (PV) and Solar Thermal, Wind, Small Hydro, Biogas, Bagasse Cogeneration, Biomass Gasifier and Biomass Rankine Cycle. The technologies supported for off-grid projects are Solar PV, Small Hydro and Biomass Gasifier.

The tool runs in Microsoft Excel with a combination of Excel formulas and Visual Basic for Applications (VBA) code.

This version of the tool was updated (Version 2.1) in June 2016 to fix an issue with calculation of accelerated depreciation benefit.

Version 1 of this tool can be accessed here.

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