Supreme Court Rules Generation-Based Incentives (GBI) are Mandatory Add-ons to Wind Power Tariffs

In a significant judgment (Civil Appeal No. 4495 of 2025), the Supreme Court of India has upheld that the Generation-Based Incentive (GBI) granted to wind power generators must be disbursed in addition to the determined tariff. The Bench, comprising Justice Pamidighantam Sri Narasimha and Justice Atul S. Chandurkar, dismissed appeals by Andhra Pradesh DISCOMs that sought to adjust these incentives against the tariff.

The Court introduced the doctrine of “Regulation as a Collaborative Enterprise,” stating that while State Electricity Regulatory Commissions (SERCs) have plenary authority over tariff determination, this power cannot be exercised to nullify the objective of Union Government policy grants. The ruling clarifies that GBI is a “generator-focused incentive” designed to support national environmental targets and cannot be converted into a “consumer subsidy” by reducing the payable tariff.