Centre Ends 100% ISTS Waiver for Renewables From July 2025

From 1 July 2025, inter-state transmission (ISTS) charges and solar and wind projects will no longer receive government subsidies, as the Centre has ended the 100 per cent waiver. This move aims to ensure that renewable energy developers do not delay and commission their projects on time.

Responsible spoke to the sector leaders to know how this move will impact them. While speaking with Vasudha Madhavan, Founder & CEO of Ostara Advisors, she said that the decision to withdraw the inter-state transmission subsidy for renewable energy projects commissioned after June 2025 will likely increase transmission costs by approximately 16 per cent, impacting tariffs and the financial viability of upcoming projects. “While this presents a near-term challenge for developers, it could also catalyse a shift toward more decentralised, intra-state renewable energy generation and drive greater investment in battery storage solutions.”

The fees that developers charge discoms to transfer power between states are known as ISTS charges. 

According to government policy, developers of renewable energy projects that can be finished by 30 June 2026 will be eligible for a 75 percent waiver of ISTS charges, rather than a 100 per cent waiver for 25 years. Projects that are put into service by 30 June 2028, will receive a 25 per cent reduction in ISTS fees for the same period. However, no ISTS price relief will be granted for projects that are still unfinished beyond 20 June 2028.