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4.33 The levelisation of generation due to annual de-gradation ought not to have been considered additionally when the Capacity Utilisation Factor (CUF) allowed at 18% duly takes into account the year-on-year energy generation including the de-gradation of a Solar Power plant in the computation of tariff. The Capacity Utilisation Factor as fixed at a reduced level adequately protects the interest of the Project Developers in regard to de-gradation of the solar model. Additionally allowing the levelisation of generation due to annual de-gradation would result in un-intended double benefit to the Solar Project Developers. 4.34 As mentioned above the capacity utilisation factor allowed at 18% is duly factoring the year-on-year energy generation including the de-gradation of a Solar Power Plant in the computation of tariff. The capacity utilisation factor as fixed at a reduced level adequately protects the interest of the Project Developers in regard to de-gradation of the solar model. Additionally allowing the levelisation of generation due to annual de-gradation would result in un-intended double benefit to the Solar Power Developers.

12. Issue D: Annual Degradation of Solar Plant 12.1 The Appellant has contended that the levelisation of generation due to annual de-gradation ought not to have been considered additionally when the Capacity Utilisation Factor (CUF) allowed at 18% duly takes into account the year-on-year energy generation including the de-gradation of a Solar Power plant in the computation of tariff. The Capacity Utilisation Factor as fixed at a reduced level adequately protects the interest of the Project Developers in regard to de-gradation of the solar module. Additionally allowing the levelisation of generation due to annual de-gradation would result in un-intended double benefit to the Solar Project Developers.

Our Findings:

12.4 The Appellant has submitted that the annual degradation of solar plant ought not to have been considered additionally when lower capacity utilization factor (CUF) at 18% has been allowed which would result into un-intended double benefit to solar project developers.

Per Contra, the Respondent and the State Commission have contended that annual degradation and CUF are entirely different elements and cannot be presumed to be inter-se-factored. While CUF is based on a variety of factors such as radiation quality and intensity, presence of aerosol and dust etc., the annual degradation reflects the deration of the solar module affecting the actual generation. While taking the spirit of the remand of this Tribunal, requiring the State Commission to examine whether the levelising tariff ensures recovery of the revenues permissible to the developers during the life cycle of the plant at the energy sent out with degradation, we find that the State Commission has followed revenue stream against the tariff stream to arrive at the same NPV of revenue with or without levelisation. As such, the State Commission has considered the effect of annual degradation on the energy output and rightly levelised the net generation over the life of the project commensurate with the levelised revenue receipts. We, therefore, find that the approach and computations made by the State Commission are just and right in line with the remand decision made by this Tribunal.