22094106 Government Policies on Solar in India

8/8/2019 22094106 Government Policies on Solar in India

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New Solar Power policy

The Central Government is gearing up to launch a new solar powerpolicy, Solar Mission, incorporating a slew of concessions and

incentives for those involved in the manufacture of solar power

generation equipment. Union Minister for New and Renewable EnergyFarooq Abdullah said here on 17th Sep 2009 that the new policy would

be announced on November 14. It will be based on National SolarMission as drafted on July 18th,2009. The mission aims for solar grid

parity by 2020 thereby achieving a generation capacity of 20,000MW

and a capacity of 100,000MW by 2030.

National Solar Mission

AIM

National Solar Mission in Indias National action plan on climate changehas the objective of making solar generated power a major source of

meeting Indias power needs in the coming decades.

20,000MW of installed solar generation capacity by 2020.

Solar power cost reduction to achieve grid parity by 2020

100,00MW by 2030 or 10-12% of total power generationcapacity estimated for that year.

4-5GW of installed solar manufacturing capability by 2017

As per the aim of the mission an important aspect of itsimplementation methods which could prove benefitial in our current

project are:

Pilot projects to validate business models for large scale rural

electrification projects.

Stand alone power plants with micro grid for remote villages toprovide electricity for residential, community and commercial

purposes.

Small grid connected rural power plants upto 3MW for capacityaddition to existing rural grids. Such plants will typically be

connected to 11 KV grid.

Policies to be implemented in view of the national solar mission:


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The policies which will prove beneficial to Mayur in its current ruralelectrification project are listed out as below:

1) Incentives for solar electricity generation

GBI to offset burden of utilities due to higher tariff for solarpower fixed by regulators. (Rs 10/kWhbe provided for 20 years

for projects for the first 3 years.)

Fiscal incentives- tax holiday, customs duty, excise dutyexemption.

Interest rate subsidy and favorable loan repayment for off grid

applications.

2) No capital subsidy or accelerated depreciation for power generation

programmes except for solar heating and rural electrificarion.


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In case Roof top PV systems are used in the project these variousincentives will be provided by the government:


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Central government will offer loans at the rate:

2% interest for 5 years for solar thermal water heaters for domesticuse

2% interest for 5 years for off grid solar PV(5-100 kW installed with

energy efficient light) ie for SLS to encourage its use particularly inrural areas.

Generation Based Incentive For GridInteractive Solar Thermal Power Generation

Projects

Eligible organizations:


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The generation-based incentive will continue to decrease, as and when theutility sign a PPA for power purchase at a higher rate. The proposed annualescalations agreed with the utility, as in force, should be reflected in the PPA.4.6 The generation based incentive approved for a grid interactive solarthermal power generation project may be available for a maximum period often years from the date of approval and regular power generation from thatproject, provided the utility continues to purchase power from that gridinteractive solar thermal power plant.

The Ministry may, at any given time, even before 31st March, 2010,announce a new generation based incentive and guidelines, which will beapplicable to all such proposals / projects that have not been approved bythat time.

The incentive will be released by IREDA to the eligible solar thermal powerproject developer on quarterly basis.

In case of delay for setting up the power plant

A project developer will be informed about the time frame allowed forsetting up the power plant. Generally a project developer will be

allowed to commission a project as per the time schedule given by the

project developer in the DPR, unless communicated otherwise. Thepenalty will be imposed only after that time limit has passed. Since the

generation based incentive under this demonstration programme isavailable till 31st March 2010, therefore, it is necessary to complete

the commissioning work by 31st December 2009 so that in the

remaining time the other formalities for entering into agreement withIREDA, inspection of the plant, rectification of deficiencies etc can be

taken care of. After 31st March, 2010 the Ministry may not be in a

position to grant incentive for any project as per the present set ofguidelines, which are not been approved by that time. In case, theMinistry announces new guidelines after 31st March, 2010, any

incomplete project may apply afresh under the new guidelines and in

that case the incomplete project may be eligible for the new incentiveapplicable at that time. Therefore, the early completion of projects

would be desirable to avail the incentive under the demonstrationprogramme.

INCENTIVES FOR SOLAR PHOTOVOLTAIC

Silicon in all forms and undiffused silicon wafers have nil duty

rate and excise rate.

Solar cells whether or not assembled in modules or panels are

free

Solar lantern or lamp has 10.0% duty rate

Equipment gadgets based on solar energy have 7.5% duty rate


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Specified raw materials for manufacture of solar cells & moduleshave nil duty rate.

Specified Non-Conventional Energy devices/systems have nil

excise rate

Accelerated 80% depreciation on specified renewable energy

based devices/projects

Various government policies that can be benefitial for implementation

of Mayurs REenergy project are:

SPV programme 2009-10

Solar lanterns programme 2009-10

SPV Programme 2009-10

Central Financial Assistance (CFA) in form of capital subsidy will beavailable from the Ministry for installation of the SPV systems as

follows:

SPV Home-lighting systems2500 (18Wp)

4800 (37-74 Wp)

SPV Street Lighting systems

9600 (74 Wp)

Stand-alone SPV Power plants

- more than 1 kWp (withcapacity less than 1 kWp on

case to case basis.)Rs125/Wp

- more than 10 kWp with

distribution line

Rs 150/Wp

Service Charges to SNAs/ Implementing AgencySPV Home-lighting systems Rs.200 per system

SPV Street lighting systems (For Urban areas only) 2% of CFA

Support to Implementing Agencies for Promotional Activities:

The Ministry will provide Central Financial Assistance to theImplementing Agencies for


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the following promotional activities:

Seminars/ workshops/ symposia/ training: Support upto a

maximum of Rs. 2

lakhs per event will be provided to State Nodal Agencies/ MunicipalCorporations

Technical institutions for organizing seminars/ workshops/symposia/ training to create awareness and training etc. oninstallation of the systems in urban areas.

Publicity & Awareness: Financial support upto a maximum of

Rs. 5 lakhs willbe provided for information and publicity

Implementing agencies should enter into a Comprehensive

Maintenance Contract (CMC) for the SPV systems ordered, atleast

for a period of three years after the expiry of the warranty period. The

scope of the CMC should cover supply of spares/ parts and servicesduring its tenure. The CMC should be a separate transaction and notnecessarily part of the order. The cost of the CMC should not be

included in the cost of the systems for the purpose of computing and

claiming subsidy.

Interest subsidy for SPV systems by IREDARate of interest

7% (commercial borrowers, who can claim depreciation benefits)5% (individuals and other organizations which undertake not to claim

depreciation benefits)

Loan period is 5 yearsAmount of loan is Upto 80% of the cost of the project

No upper limits for a loanService Charge is 1% of the loan disbursed

Solar Lantern Programme during 2007-08 The Ministry will provide a subsidy of Rs.2,400/- per solar

lantern to the eligible beneficiaries in the un-electrified villages,

hamlets of the (i) Special Category States and the (ii) UT islands

(Thus this will not be applicable to Maharashtra)

Ministry will also provide Rs.100 per lantern as service chargesto the state nodal agencies/Departments and the Akshaya Urja

shops. MNES will also provide Rs. 100 per lantern to the statenodal agencies/Departments towards inspection charges of solar

lanterns sold by the Akshaya Urja shops.


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Subsidy will be provided only on eligible models of solar lanterns,procured from the pre-qualified manufacturers, after competitive

bidding.

With a view to encourage girl child to continue their studies, it isproposed to

provide a solar lantern free of cost to a girl child belonging to aBPL family residing in the un electrified villages and hamlets ofthe special category states and UT islands.

Solar Thermal Energy DemonstrationProgrammeThe cookers will either be sold/ distributed by the concerned SNA

through their own network or could be directly sold by the

manufacturers as per the modalities decided by the SNAs. Only thosemanufacturers would be eligible for supply of Dish Solar Cookers under

this programme whose product confirms to MNRE specifications andhas been tested at SEC/RTCs.

The pattern of financial support available from MNRE for concentrating

type solar cookers is as follows:

Promotion of Sale of Box Type Solar Cookers

The box type solar cookers including the cardboard designs will be soldthrough outlets of SNAs as well as Akshay Urja Shops and private

establishments/ NGOs/ Cooker Manufacturers/ Women Welfare


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Organizations/ Self Help Groups/ Institutions/ Petrol Pumps / LPGagencies etc. The outlets other than those of

SNAs will be called as associated promoters of SNAs. The incentive tothe promoters will be disbursed after verification of the sale made and

the performance seen by the SNAs. Support may be provided to

reputed NGOs, Universities, Institutions, Regional Test Centres, etc. upto a maximum of Rs.1.50 lakhs, towards organization of

promotional activities like publicity, cookingdemonstrations/competitions, seminars/ workshops,

evaluation studies,development of improved models, etc. on

solar cookers based on specific proposal received from them in theprescribed format

Solar Dish Concentrator (ARUN-160) for Industrial Process Heat

Systems

Large area solar dish concentrator (ARUN-160) technology has been developedand tested at a dairy for industrial process heat applications under a MNREsupported R&D project to IIT Bombay and M/s Clique Development Private Ltd.(CDPL), Mumbai. The technology has large potential in the industrial sector to meetprocess heat requirements.

Irrespective of the total cost of the projects, a fixed financial support ofRs.12.0 lakhs will be provided for each ARUN-160 dish involved in a project.The user organization will meet the balance cost of the solar system, and the

cost of integration of solar system with the existing system, cost of AMC, etc. The projects sanctioned to private sector organizations shall not be entitled to

grant / support from any other government organization.

Village energy Security Programme The objective of the programme is to provide energy security in villages

by meeting total energy needs for cooking, electricity and motive powerthrough various forms of biomass material based on available biomassconversion technologies and other renewable energy technologies, wherenecessary.

Village identification: The village / hamlet identified could be a tribal or

forest-fringe village / hamlet. The selected village / hamlet should haveadequate availability of fallow, common or uncultivated non-grazing landfor raising plantations. A cohesive and progressive social structure is alsoan important requirement. The village / hamlet should have minimum ofabout 50 and maximum of 400 households and should be identified inconsultation with forest, tribal and rural development departments/agencies. The test projects would be undertaken in unelectrified villages


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and hamlets that are not likely to be electrified through conventionalmeans.

MNRE provides CFA of Rs. 20000/- per household for villageswith 50-400 households. This programme is run by implementingagency such as department forest, department of rural

development, reputed and recognized NGOs, cooperatives andSNAs etc. MNRE will provide 90% of project cost with themaintenance cost of project, a balance cost will be ensured by

implementing agency.

Rural Village electrification Programme2009-10 The objective of the Programme is electrification through

renewable energy sources of those unelectrified remote censusvillages and remote unelectrified hamlets of electrified census

villages where grid connectivity is either not feasible or not costeffective.

In accordance with the approved definition of village

electrification, remote villages/hamlets will be deemed to be

electrified if a minimum of 10% of the households are providedwith electricity and electricity is also made available for

community facilities and for dalit bastis (habitations) of thevillage, if any.

Central Financial Assistance of upto 90% of the costs of the

Renewable electricity generation systems (including the cost ofAnnual Maintenance Contract (AMC), if any, for 5 years) will be

provided for approved projects for electrification of remote

unelectrified census villages and remote unelectrified hamlets.The balance cost of projects can be financed through

contribution from State Plans, beneficiaries, or other sources.However, it will be necessary that at least half of the balance

cost is met from state governments funding.

Tariff decided as per MERCApplicable Tariff for solar power projects within Maharashtra:a) The tariff for solar power projects eligible under GBI scheme is

determined as Rs 3.00 per kWh, so that maximum possible incentive

(i.e., Rs 12.00 per kWh in case of solar PV and Rs 10.00 per kWh incase of solar thermal) is available to the project developers, while at

the same time, distribution licensees and in turn, consumers arerequired to bear minimum cost of Rs 3.00 per kWh for promoting solar

energy while gaining operational

experience from such projects.


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b) While the current GBI scheme is applicable only for the first 10 MWcapacity addition within the State, in future, whenever GBI scheme is

extended to cover additional capacity, such project capacity shall alsobe covered under the same mechanism.

Accordingly, applicable tariff for solar power projects eligible under

GBI scheme as per MNRE Guidelines shall be as under:

As generation based incentive (GBI) under MNRE scheme is available

for a period of 10 years, the above tariff shall be applicable for aperiod of 10 years from the date of commissioning of the project or for

such other period as may be applicable under MNRE scheme.

22094106 Government Policies on Solar in India

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