Govt scraps uniform tariff rule, dissolves pricing pools for green energy

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The power ministry on Wednesday said it has done away with a uniform tariff mechanism and dissolved central pricing pools for renewable energy purchase pacts amid concerns over uncertainty on power tariffs.

The move is expected to ease price discovery between renewable energy producers and users as well as deployment of renewable capacity in the country.

In view of the substantial renewable energy capacity awaiting power sales agreement (PSA) signing and to expedite the deployment of RE, it has been decided to withdraw the order regarding the implementation of the Uniform Renewable Energy Tariff (URET) mechanism, the ministry said in a statement.

Consequently, the Solar Power Central Pool and Solar-Wind Hybrid Central Pool shall stand dissolved, it said.

Earlier, the ministry had ordered implementation of URET from February 15, 2024 for three years up to February 14, 2027.

The URET mechanism and the associated central pools were notified to address the potential impact on procurers in the context of declining bid-discovered prices.

However, Renewable Energy Implementing Agencies (RElAs) and RE developers have expressed concerns over procurers reluctance towards signing PSAs (power sale agreements) under URET on account of uncertainty of tariffs over a three-year period, the ministry said in its latest order.

A number of renewable energy projects have been stalled in the absence of advanced power purchase pacts which are required to fund these projects.

The ministry, however, said that the the bids received and letters of award issued under URET so far shall remain valid on a standalone basis and may be considered for the signing of power purchase agreements.

The REIAs may proceed to execute the PSAs/PPAs with the procurers/developers for these bids, it said.

India aims to have 500 GW of renewable energy by 2030. The country has 185 GW of renewable energy installed capacity as of June 30, 2025, which exclude around 50 GW of large hydro energy projects.