Tariff Analysis and Cost-Benefit Tool for Solarizing Irrigation: Methodology

The document describes the methodology for the Tariff Analysis and Cost-Benefit Tool for Solarizing Irrigation (TACTS), designed to support the Pradhan Mantri Kisan Urja Suraksha Evam Utthaan Mahabhiyan (PM-KUSUM) scheme. The tool provides a framework for calculating solar tariffs using the levelized cost of energy (LCOE) method, analyzing risk reduction financing instruments, and conducting cost-benefit analyses from the perspective of distribution companies (DISCOMs).

• The TACTS tool is divided into three functional sections: tariff calculation for PM-KUSUM projects, financing analysis for risk reduction and alternative mechanisms, and a cost-benefit analysis of solarizing agricultural power demand for state nodal agencies and DISCOMs.
• Tariff determination for solar plants under the PM-KUSUM scheme utilizes the levelized cost of energy (LCOE) method, which is the ratio of the net present value of total capital and operating costs to the net present value of electricity generated over the plant's life. The calculation incorporates parameters such as debt to equity ratio, return on equity, and discount rates as per Central Electricity Regulatory Commission guidelines.
• The tool's cost-benefit analysis employs the utility cost test method to evaluate the impact on DISCOMs. Key benefits identified include Avoided generation capacity cost (AGCC), Avoided power purchase cost (APCC), and Avoided transmission capacity cost (ATCC), while the Feed-in tariff (FIT) cost is identified as a financial loss to the DISCOM.
• To determine coincidence factors for the cost-benefit analysis, the tool analyzes total power demand and variable renewable energy (VRE) generation in 15-minute intervals over one year for each state, identifying the top 5% of net power demand as peak demand.

APA

International Institute for Sustainable Development (n.d.). Tariff Analysis and Cost-Benefit Tool for Solarizing Irrigation: Methodology. https://www.iisd.org/system/files/2025-05/tariff-analysis-solarizing-irrigation-tool-methodology.pdf

Chicago

International Institute for Sustainable Development. Tariff Analysis and Cost-Benefit Tool for Solarizing Irrigation: Methodology. n.d. https://www.iisd.org/system/files/2025-05/tariff-analysis-solarizing-irrigation-tool-methodology.pdf.

Wikipedia

{{cite report |author=International Institute for Sustainable Development |title=Tariff Analysis and Cost-Benefit Tool for Solarizing Irrigation: Methodology |url=https://www.iisd.org/system/files/2025-05/tariff-analysis-solarizing-irrigation-tool-methodology.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{internationalinstituteforsustainabledevelopmentndtariff, author = {{International Institute for Sustainable Development}}, title = {{Tariff Analysis and Cost-Benefit Tool for Solarizing Irrigation: Methodology}}, institution = {International Institute for Sustainable Development}, url = {https://www.iisd.org/system/files/2025-05/tariff-analysis-solarizing-irrigation-tool-methodology.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }