Industry stakeholders flagged issues around tariff volatility and the reluctance of power procurers to sign long-term agreements under it

In a move aimed at unblocking stalled renewable energy projects, the Ministry of Power has withdrawn the Uniform Renewable Energy Tariff (URET) mechanism and dissolved its central pricing pools for solar and hybrid projects.

The decision comes amid rising concerns from renewable energy developers and implementing agencies over the uncertainty of tariffs under the URET framework. The now scrapped mechanism, which was notified to be in force from 15 February 2024 to 14 February 2027, aimed to harmonise tariffs across projects by pooling bids. Industry stakeholders flagged issues around tariff volatility and the reluctance of power procurers to sign long-term agreements under it.

“In view of the substantial renewable energy capacity awaiting power sale agreement (PSA) signing and to expedite deployment, it has been decided to withdraw the order regarding URET,” the ministry said in a statement on Wednesday reported by PTI.

As a result, the Solar Power Central Pool and the Solar Wind Hybrid Central Pool stand dissolved with immediate effect. Renewable energy implementing agencies (REIAs) can directly proceed to execute PSAs and power purchase agreements (PPAs) with procurers and developers based on actual bid-discovered tariffs.

The government clarified that bids already received, and letters of award issued under URET will remain valid and may proceed towards PPA execution.

India currently has an installed renewable energy capacity of 185 GW as of 30 June 2025, excluding approximately 50 GW of large hydro capacity. The country is targeting 500 GW of non-fossil fuel capacity by 2030, with accelerated renewable deployment being key to achieving this goal.