It is necessary to adopt a level/reference tariff from time to time to adapt to changes in the cost of capital and market trends. It is also important to attract private investors to improve installed capacity in grid-connected solar energy. Solar Feed in Tariff (FiT) is decided by existing public guidelines/power plants, rules, existing fixed and variable costs of the solar installation and developers during tender negotiations. AAEs are the instruments that offer a low-risk offer to investors in solar power generation and are therefore considered by investors to be the most preferred option. To preserve the interest of investors, it is important to protect their favorite tool, the ppAs. Tariff adjustments within the AAE time frame can demotivate investors. New investors may view these examples as speculative risks. Investments in renewable energy involve risks because of their variables. Uncertainties in existing AAEs increase the risks associated with solar electricity, especially when the market is still at an emerging stage. According to the World Bank, AAEs reduce the risk of uncertainty related to the volume of prices and projected sales for the energy production company (The World Bank, September 2019). AAEs also reduce risk volatility for buyers.
Mr Khana and Mr Barroso mention that the measures published at the last minute during the tenders for the National Solar Mission in a small number of states are examples of erratic behaviour (Khana-Barroso, 2014/15). The authors also conclude that investors need to feel safe before creating a solar power generation base. IHCL has signed a solar energy (PPA) sales contract with TP Kirnali Solar Ltd, a wholly-a-subsidiary of Tata Power Company Ltd. J-K suffered a deficit of 14,871 kronor in 2012/17. In contrast to the expenditure of 24.299 billion euros for the purchase of electricity in 2012-17, the turnover of the sale of electricity was only 9,428 kronor, CAG said in its report on the “social, general, economic” sectors for the year ended March 31, 2017. Recently, the government of Andhra Pradesh decided in India to review mooring agreements (PPPs) with wind and solar power companies. AAEs are located between the “customer” buyer (often a public electricity supplier) and a private generator to ensure the payment flow (The World Bank, as in September 2019). The companies argued that the government had no say in the contracts signed between distributors and developers, while the Andhra Pradesh government argued that the high costs of AAAs were difficult to meet and that tariffs needed to be revised downwards (Economic Times, September 24, 2019).
Economic times. (September 24, 2019). energy.economictimes.indiatimes.com/news/renewable/andhra-pradesh-high-court-asks-renewable-cos-to-move-aperc-against-renegotiation/71273226?utm_source=Mailer&utm_medium=ET_batch&utm_campaign=etenergy_news_2019-09-25&dt=2019-09-25&em=bWFuanVzaHJlZ. Solar tariffs rose from 17 units in 2009 to just R2.44 – the lowest solar tariff discovered in May 2017 – mainly due to lower module prices, improved technology and increased competition in the sector.