Ministry of Power scraps Uniform Renewable Energy Tariff

The Ministry of Power has withdrawn the Uniform Renewable Energy Tariff (URET) mechanism, including the Solar Power Central Pool and Solar-Wind Hybrid Central Pool, due to delays in project approvals and power sale agreements.

The URET framework, introduced in February 2024, was designed to stabilise tariffs for solar and hybrid projects till 2027. However, many state distribution companies and utilities did not sign power sale agreements due to uncertainty over pooled tariff rates. These stalled projects total tens of gigawatts.

According to the Office Memorandum dated 1 August 2025, ongoing bids and Letters of Award will continue as standalone agreements. Renewable Energy Implementing Agencies, such as SECI, NTPC, and NHPC, can now negotiate directly with developers and buyers without needing a pooled pricing model.

The Ministry cited faster project deployment and greater market flexibility as reasons for the policy change. Over 40 GW of pending solar and hybrid capacity could be unlocked. States and developers are now allowed to set tariffs based on market conditions.

Industry associations such as the National Solar Energy Federation of India welcomed the decision, noting that it will help close financing and reduce delays. DISCOMs may benefit from cheaper power but will also have to handle greater price variation. Regulators are expected to guide transitional issues at both central and state levels.

The shift follows the Supreme Court’s 22 July order directing faster emissions control in the power sector. It is aligned with India’s target of installing 500 GW of non-fossil fuel capacity by 2030.