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Karnataka Electricity Regulatory Commission Proposes Lower Ceiling Tariff for Wind Projects Through FY 2029
March 24, 2026
The Karnataka Electricity Regulatory Commission (KERC) has released a new discussion paper suggesting a generic ceiling tariff of ₹3.24/kWh for wind power projects. This proposed rate is intended to cover the three-year period from the 2026-27 financial year through 2028-29. Notably, this new figure represents a slight decrease from the current ceiling tariff of ₹3.34/kWh, which remains in effect until March 31, 2026. Stakeholders and interested parties are invited to provide their feedback on this new pricing structure by April 9, 2026.
This downward adjustment in the tariff reflects broader industry trends, including a steady decline in capital costs and improved efficiency in wind technology. In its analysis, the Commission reviewed recent data from over 50 wind projects in Karnataka, noting that modern installations are achieving significantly better capacity utilization. By lowering the ceiling, the state aims to ensure that future competitive bidding processes result in the most cost-effective power procurement for the grid. The new tariff will also serve as the standard for payments related to any banked energy purchased by distribution companies.
To arrive at this ₹3.24/kWh figure, the Commission considered several critical financial and technical factors, such as operations and maintenance expenses and prevailing interest rates. The proposal assumes a standard debt-equity ratio and a 15-year tenure for term loans to ensure projects remain financially viable for developers. This regulatory update comes on the heels of a record-breaking year for wind installations in India, which saw an 85% year-over-year increase in 2025. For businesses in Karnataka, these evolving standards highlight the state’s ongoing commitment to expanding its renewable energy portfolio with competitive pricing.
