Chhattisgarh’s solar policy

EB Bureau

Thursday, October 16, 2014:  According to the Ministry of New and Renewable Energy (MNRE), the total installed grid-connected solar power capacity at the end of FY 2013-14 stood at 2632MW. Out of this, only 688 MW, representing 26 per cent, was added under the Jawaharlal Nehru National Solar Mission (JNNSM), whereas about 1323MW (almost 50 per cent of the capacity) was added under various state solar policies.

While every state has specific solar power generation targets under the renewable purchase obligation (RPO), most of the states are just starting to add capacities under their respective state policies. The state government formulates the policies for a certain duration and, in that period, solar power projects are commissioned, approved and installed, based on the needs and potential of a particular area.

Chhattisgarh’s policy on solar energy is operative till March 31, 2017. All the solar power plants approved during this period will be eligible for the benefits of this policy.

The salient features of the policy

The government of Chhattisgarh aims to achieve a solar power generation capacity between 500MW to 1000MW by March 2017. It plans to encourage three types of projects, namely, grid-connected solar generation, solar parks and rooftop solar power projects. The government has laid down three routes to achieve the target, which are:

1. Grid-connected solar power projects for captive use, direct sale to a licensee or any other person (third party) or a state other than Chhattisgarh.

2. Grid-connected solar power projects for sale through the renewable energy (solar) certificate mechanism. The power generated from these projects can be purchased by state discoms at a pooled cost as determined by the Chhattisgarh State Electricity Regulatory Commission (CSERC). The Chhattisgarh State Power Distribution Company Ltd (CSPDCL) is the final body empowered to take a call in this regard, after taking into consideration the supply and demand position of power in the state.

3. Sale of solar power to distribution companies to fulfil renewable purchase obligation (RPO).

Incentives provided under the industrial policy of Chhattisgarh

Despite the fact that the state’s current industrial policy lapses in 2014, the state government is providing various subsidies to solar power plants till March 2017. The state government has extended all the incentives, including the interest subsidy, fixed capital investment subsidy, exemption from electricity and stamp duty, exemption/concession in land premium (price of the land or property), project report subsidy and the technical patent subsidy. Here are some of the benefits that the solar players in Chattisgarh can avail.

Exemption from electricity duty: The state government has exempted all solar power projects from paying electricity duty on secondary consumption and captive consumption within the state.

Exemption from value added tax (VAT): The solar power developers will be exempted from paying VAT by the commercial tax department for all equipment/materials that are required for solar power projects. Also, charges for open access shall be applicable as approved by the CSERC or the Central regulatory body for third party sale outside the state.

Banking facilities: The energy banking facility will also be allowed to the developers at mutually agreed terms and wherever necessary, approval of the appropriate electricity regulatory commission can be obtained.

Grid connectivity and evacuation facilities: Central government transmission companies (CG transcos) or distribution companies (discoms) will provide grid connectivity and evacuation facilities at cost price to the project developer. Further, if developers wish to lay the evacuation lines themselves, they can do so without paying supervision charges to CG transcos. Along with this, land acquisition and statutory clearances/approvals need to be obtained by the developer of the solar power plant as per the policy of the state government. The developers will be required to commission the project within 24 months from the date of allotment.

Other incentives: The solar power developers who commission their solar power plant by March 2017 will be entitled to several incentives, which they can avail for a period of seven years from the date of implementing the project.