Government Incentivised and Extended Support for Solar Energy Generation

Union Minister for Power and New and Renewable Energy R.K Singh quoted that for promoting solar energy in the residential sector, the Ministry of New and Renewable Energy is implementing Rooftop Solar Programme Phase-II. Under this Programme, 4000 MW rooftop solar (RTS) capacity addition is targeted in the residential sector through Central Financial Assistance (CFA).

CFA up to 40% of the benchmark cost is provided for RTS projects up to 3 kW capacity and up to 20% for RTS system capacity beyond 3 kW and up to 10 kW for individual households. For Group Housing Societies/Residential Welfare Associations (GHS/RWA), CFA is limited to 20% for RTS plants for supply of power to common facilities maximum 500 kW capacity.

In addition, the Government has taken several steps to promote solar energy in the country. These include:

• Permitting Foreign Direct Investment (FDI) up to 100 per cent under the automatic route,
• Waiver of Inter-State Transmission System (ISTS) charges for inter-state sale of solar and wind power for projects to be commissioned by 30^th June 2025,
• Declaration of trajectory for Renewable Purchase Obligation (RPO) up to the year 2022,
• Setting up Ultra Mega Renewable Energy Parks to provide land and transmission to RE developers on a plug and play basis,
• Schemes such as Pradhan Mantri Kisan Urja Suraksha Evam Utthaan Mahabhiyan (PM- KUSUM), 12000 MW CPSU Scheme Phase II, etc.,
• Laying of new transmission lines and creating new sub-station capacity under the Green Energy Corridor Scheme for evacuation of renewable power,
• Notification of standards for deployment of solar photovoltaic systems/devices,
• Setting up of Project Development Cell for attracting and facilitating investments,
• Standard Bidding Guidelines for tariff-based competitive bidding for procurement of Power from Grid Connected Solar PV and Wind Projects.
• The government has issued orders that power shall be dispatched against Letter of Credit (LC) or advance payment to ensure timely payment by distribution licensees to RE generators.
• Conducting skill development programmes to create a pool of skilled manpower for setting up, operation and maintenance of RE projects.

The Government is implementing a scheme for setting up 50 Solar Parks with an aggregate capacity of 40,000 MW in the country. These parks are meant to provide developed infrastructure to facilitate the installation of solar power projects. Central Financial Assistance of up to Rs. 25 Lakhs for preparation of Detailed Project Report and Rs. 20 Lakhs per MW or 30% of the project cost, whichever is lower, is provided for the development of such Parks under the scheme.

The government offered several policies for solar panels at subsidized rates.

Provision of central financial assistance (CFA) for institutional and social sectors was available under Phase-I of the Rooftop Solar Programme, which was under implementation in the country till March 2020. With a reduction in the cost of the installation of Rooftop Solar (RTS) power systems, central financial assistance to beneficiaries of all sectors, except the residential sector, has been discontinued under Phase-II of the Rooftop Solar Programme currently under implementation.

However, Under Ph-II of the RTS Programme, incentives of 5% of the benchmark cost for RTS capacity addition beyond 10% and up to 15% of the baseline RTS capacity as of 31st March of the previous year, and incentives of 10% of the benchmark cost for RTS capacity addition beyond 15% of the baseline RTS capacity as on 31st March of the previous year, are being provided to DISCOMs towards the installation of RTS projects in all sectors, including solar power panels at educational and religious institutions, NGOs, etc.