Section 86(1) (e) of the Electricity Act 2003, mandates the State Electricity Regulatory Commissions to promote co-generation and generation of electricity from renewable sources of energy by providing suitable measures for connectivity with the grid and sale of electricity to any person. The Regulatory Commissions are also required to specify,
for the purchase of electricity from such sources, a percentage of the total consumption of electricity in the area of a distribution Licensee. Further the Act, under Section 62, empowers the Commissions to determine the tariff for the supply of electricity by a generating company to a distribution Licensee in accordance with the provisions of the
Act. Also, Section 61 provides that the Commissions specify the terms and conditions for the determination of tariff and, in so doing, be guided by the principles listed in Clauses (a) to (i) of that Section.