Government fund release for off-grid solar power plants 2012-13

Thursday, August 01, 2013: As per a list published by the ministry of New and Renewable Energy of state-wise funds released during 2012-13 under the Off-grid and Decentralized Solar scheme of Jawaharlal Nehru National Solar Mission, states such as Chhattisgarh, Rajasthan and UP have managed to get huge subsidies from the ministry in the amounts of Rs 528.013 millions, Rs 389.032 millions and Rs 267.535 millions respectively out of the total release of Rs 3991.647 millions.

Other states, mostly in special state category, have managed to draw big amounts as subsidy are Jammu & Kashmir, Manipur and Kerala with Rs 336.11 millions, Rs 148.33 millions and Rs 85.468 millions respectively.

Other non-state entities like CEL, REIL, NABRD, RRBS, NGOs and system integrators etc account for a total of Rs 1752.601 millions of the total funds released.

The Ministry, under the Off-grid and Decentralized Solar Application scheme of JNNSM provides a subsidy of 30 per cent of the project cost ranging from Rs 42 to Rs 72 per watt peak for off-grid SPV power plants having module capacity up to 100 kWp depending on their capacity and configuration in general category States.

In Special Category States, UT Islands and districts with international borders, the ministry provides 90 per cent of the cost of the off-grid SPV power plants limited to the range of Rs 126 and Rs 216 per Wp for installation by Central and State Government Ministries, departments and their organisations, State Nodal Agencies and Local Bodies. The Ministry also provides a subsidy of 30 per cent of the cost of project limited to Rs 150 per watt for installation of micro/mini-grid SPV power plants of unit capacity up to 250 kW.

In other incentives, the ministry also provides generation based incentives at a rate, which is equal to the difference between CERC approved applicable tariff and a notional rate of Rs. 5.50 per unit for the year 2010-11, escalated at three per cent every year thereafter for solar power projects of total capacity 100 MW.

The Government is also extending exemption on excise duty on the components procured from within the country and levying concessional customs duty on the components imported for the first time installation of solar power plant. Accelerated depreciation and tax holiday facilities are also available for solar power projects.

It is noteworthy that Chhattisgarh has one of the most lucrative incentive policies for the solar sector that has clearly helped the state attract big investments. The state of Chhattisgarh extends all benefits under its Industrial policy to the Solar Power plants till 2017, even though the Industrial policy lapses in 2014. The policy includes interest subsidy, FCI subsidy, technical patent subsidy, electricity, VAT, stamp duty and cross subsidy surcharge exemption. On the other hand, Rajasthan stands naturally benefited because it receives abundant direct sun light, more than any other states in India.