One after other many Indian States are coming out with their specific state solar policies & Incentives. Recently on 20th October’12 Tamil Nadu also announced its ‘Tamil Nadu solar energy policy 2012’. Earlier many more states like Andhra Pradesh too have come out with Andhra Pradesh Solar Policy 2012, Madhya Pradesh with MP Solar policy 2012, Uttar Pradesh with their own Uttar Pradesh Solar Power Policy 2012…Of all of the state solar policies, needless to say that Gujarat is leading the way with Gujarat Solar Policy for Phase I & Phase II with already more than 700+ MW installed Solar Power Projects !
Below I have tried to highlight some of the important features of all the above mentioned and recently announced solar polices in India in 2012. Also attached is the chart of solar tariffs across various states in India along with the applicability of state specific Renewable Purchase Obligations (RPO)..
Tamil Nadu Solar Policy:
The State of Tamil Nadu on 20th October 2012 unveiled “Tamil Nadu Solar Energy Policy 2012” with an aim to produce 3000 MW from solar energy in next 3 Years by 2015. Some of the salient features of the policy are :
- The policy hopes to generate 1000 MW each year till 2015.
- The Tamil Nadu Energy Development Agency will act as the single window clearance agency for solar power projects in the state. An Empowered Committee comprising Chief Secretary, Finance Secretary, Energy Secretary, CMD-TANGEDCO, CMD-Tamil Nadu Energy Development Agency – Member Secretary and TANGEDCO technical member will accord project clearances for the establishment of solar power projects in the state
- The policy also involves large-scale power consumers into the initiative by mandating six per cent SPO (Solar Purchase Obligation) on them from.
- The state would make it compulsory for high tension power consumers like special economic zones (SEZ), industries, IT parks, telecom towers, colleges and residential schools and buildings with built up area of 20,000 square metre or more to purchase 6 % solar power from Jan 2014 (starting with 3% till December 2013 and 6% from January 2014) for the. The SPO would be administered by TANGEDCO (Tamil Nadu Generation and Distribution Corporation Ltd).
- The 3000 MW of Solar Power will be achieved through Utility Scale Projects, Rooftops, and under REC mechanism as follows :
- In utility scale out of 1500 MW, 1000 MW will be funded through SPO and balance 500 MW through Generation Based Incentive (GBI) provided by the government.
- Solar parks with a capacity of 50 MW each will be developed in 24 districts across the state. Solar parks may comprise 250 MW in sizes of 1 to 5 MW, 600 MW in sizes of 5 to 10 MW and 650 MW of sizes above 10 MW. Solar Power projects will be developed through competitive/reverse bidding.
- Exemption from electricity tax, tax concessions, exemption from demand cut to those who produce solar power from their rooftop, used for self-consumption/sale to utility will be allowed for 5 years.
- Solar power projects would be developed through competitive bidding. Investments through joint ventures by state undertakings will also encouraged through competitive bidding
- The policy also promotes solar rooftops in domestic and government buildings. As for the domestic rooftop, a GBI of Rs 2/Unit for the first two years, Re 1/Unit for next two years and 50 Paisa/Unit for subsequent two years will be provided for all solar or solar-wind hybrid rooftops being installed & commissioned before March 31, 2014.
- The state government, in all its new buildings, will provide solar rooftops, while all existing buildings will be provided solar panels in a phased manner. The government will also promote net metering to promote rooftop penetration.
- Street lighting and drinking water distribution would be managed gradually through solar energy in local body and government buildings.
- The government would also be energising over one lakh street lights through solar energy by 2015-16 and water supply installations in local bodies will be energized through solar power phase wise.
- As per the policy, installation of solar water heating systems would be made mandatory for industries having hot water boiler/steam boiler using fossil fuel.
Also attached below is the chart of solar tariffs across various states in India along with the applicability of state RPO’s..
Andhra Pradesh Solar Policy:
The government of Andhra Pradesh has recently announced its State Solar Policy on 26th September’12. The below mentioned incentives are applicable only if the project is commissioned by June 2014.
Following are some important policy highlights & Incentives offered :
- 100% banking is permitted from January to December of the year.
- The Banking Charges will be 2 %
- Banked units can not be adjusted during February to June and during evening peak hours 6.30 PM to 10.30 PM.
- Sale to third party, captive consumption allowed (both inter-state and intra-state)
- State DISCOMs will support APPC+REC model
- For all the intra-state open access transactions (through 33kV system), wheeling and transmission charges are exempted. (for Captive / Third Party Sale )
- No Cross Subsidy Surcharge for Open-Access Transactions made by Solar developers. This will be a great relief for consumers as CSS remains the major cause of worry for consumers as well as developers opting for third-party sale / open access.
- Electricity Duty is also exempted for all the solar power projects opting for third party sale and/or captive usage.
- Refund of VAT by Commercial Department for all the good used for Solar developers
- Captive Co-Located projects will also be eligible for REC
- Faster power evacuation approval from TRANSCO/DISCOM – Within 21 days.
- Refund of Stamp duty and registration charges paid for land purchase
- Projects availing all these benefits can also claim REC benefits however solar project developers participating into REC mechanism might not be able to claim all the benefits that are proposed under the State solar policy.
Madhya Pradesh Solar Policy (MP Solar Policy):
The State of Madhya Pradesh has come out with its Solar Policy 2012. There will be four categories of Solar Projects covered under the policy :
Madhya Pradesh Solar Policy (MP Solar Policy )
|Category I||Category II||Category III||
|Projects selected as per the competitive bidding process for selling power to MP Discoms / MP Power Management Company – Capacity as per RPO targets Specified by MPERC which I have mentioned in above table||Projects set up for captive use or sale of power to 3rd party within or outside the state or for sale of power to other states through open access – Unlimited Capacity||Projects set up under Renewable Energy Certificate (REC) mode – Unlimited Capacity||
Projects under Jawaharlal Nehru National Solar Mission – As per JNNSM guidelines
- The solar policy additionally imposed a 10-year exemption in electricity fees and a 4% subsidy by the state government for wheeling charges and banking of generated power and exemption, as per rules in VAT and entry tax.
Uttar Pradesh Solar Policy (UP Solar Policy):
The state of Uttar Pradesh (U.P.) in August 2012 has published a draft solar policy ‘The Uttar Pradesh Solar Power Policy 2012′. The target it to reach 1GW of installed capacity of SPP in the state by March 2017.
Salient features of draft policy:
- The U.P. solar policy removes wheeling charges for all grid connected solar power projects.
- Policy to remain valid up to March 31, 2017 and aims to achieve 1000 MW of solar power of capacity addition till then
|Phase||Period||Total target capacity|
- Grid connected solar power projects are divided into 3 sub categories: Small (2-10 MW), Medium (10-25 MW) and Large (> 25 MW).
- The developers will have option to sell power to distribution licensee/utility on tariff based competitive bidding, subject to approval by UPERC or at Average Pool Price under REC Mechanism
- Policy allows for sale of electricity to a 3rd party at a mutually agreed price.
- Policy offers various incentives to developers like exemption from transmission/ wheeling and open access charges for 3rdparty use and captive units.
- Single window clearance system i.e. The nodal agency, the UPNEDA, will be the single window of clearance for all solar power projects under the policy
- Exemption from electricity duty on energy consumed by developers for its own use
- Facilitation in land allotment by state nodal agency etc.
- Also , provision of Letter of Credit and Default Escrow Account will be provided in the PPAs to be signed by the Discom/STU.
- Solar Parks at appropriate locations in the state would be created on PPP basis.
Meanwhile Delhi is also coming out with their roof top solar power program soon. Let’s see how many of the above policies would be implemented successful in future ;)
With all the above policies and programs announced do you think Gujarat would stay quite ! Off- Course not - Yes, Gujarat again leading the way has come out and have called for RFP from interested developers under Roof Top Photovoltaic Program for solar power plants of 5 MW each to be implemented at Rajkot and Mehsana City.
Also now all eyes are on the Solar Projects that are to be installed and commissioned under JNNSM Phase I. Let’s see how many of them crosses the finish line.