Central and State Government Solar Policies

Central Government
NAPCC
India is faced with the challenge of sustaining its rapid economic growth while dealing with
global threat of climate change. There are some observed changes in climate parameters in India
too, like increase in surface temperature by 0.4 ˚C, variation in monsoon patterns, rise in sea
levels by 1.06-1.75mm per year, extreme weather conditions breaking over 130 years records,
Erratic water flow in perennial rivers originating from Himalayas. Alongside, the fast depleting
conventional sources of power generation have worsened the situations that prophecy of energy
crisis. India, in recent times, has started emphasizing power generation from renewable sources
that is either grid interactive or off grid. India actively engaged in multilateral negotiations in the
UN Framework Convention on Climate Change (UNFCCC), in a positive, constructive and
forward-looking manner. In order to achieve a sustainable development path that simultaneously
advances economic and environmental objectives, on 30 June 2008, the National Action Plan for
Climate Change (NAPCC) was framed with eight core missions:

Click here to know the latest state wise solar policies, incentives, bids and more.

1. National Solar Mission – renamed Jawaharlal Nehru National Solar Mission (JNNSM)
2. National Mission for Enhanced Energy Efficiency
3. National Mission on Sustainable Habitat
4. National Water Mission
5. National Mission for Sustaining the Himalayan Ecosystem
6. National Mission for a Green India
7. National Mission for Sustainable Agriculture
8. National Mission on Strategic Knowledge for Climate Change

Jawaharlal Nehru National Solar Mission (JNNSM)

The National Solar Mission was framed to promote the use of solar energy for power generation
and other application; also promoting the integration of other renewable energy technologies like
biomass and wind with solar energy options. The Solar Energy can be tapped via two routes
solar thermal and solar photovoltaic. Thus the framework is targeted to achieve Solar energy
utilization via these routes:
Utility Off
NSM Grid Grid Solar Collector
PhasePower Solar (sq. meters) REMARKS
Focus on capturing the low-hanging options in solar
thermal and on promoting off-grid systems to serve
2010- 1000- populations without the access to commercial energy
13 2000 200 7 million and modest capacity addition in grid based systems
Capacity will be aggressively ramped up to create
conditions for up scaled and competitive solar energy
2013- 4000- penetration in the country after taking into account
17 10000 1000 15 million the experience of the initial years
To create favorable conditions for solar
2017- manufacturing capability, particularly solar thermal
22 20000 2000 20 million for indigenous production and market leadership.

Tax Incentives, Subsidies and Incentives under JNNSM

Various tax exemptions, capital subsidies and incentives are available for several components
and sub-components of solar energy value chain. JNNSM promotes the assembly of solar
modules after import of cells which is free from import taxes. Some steps to avails subsidy can
be summarized as shown:

Other benefits like Generation based incentives (GBI), 80% accelerated depreciation income tax
benefits on renewable energy products including solar. Several products like Solar lanterns,
street lights, blinkers and traffic signals are to be manufactured under specifications laid down by
MNRE to avail capital subsidy benefits. Also the Generation based incentives.
 Policies supporting Grid-interactive Renewable Power
National Rural Electrification Policy 2006
Rural Electrification is high time need for india where still 45 million households are un-
electrified. Several goals are set under this policy:
 Access to quality and reliable electricity at reliable rates and minimum lifeline consumption of
1unit/household/day by year 2012.
 For remote villages where grid electrification is not feasible, off-grid based solutions based on
stand alone systems to be taken up for supply of electricity.
 Every state to come up with rural electrification plan mapping details of electricity delivery
mechanism that may be linked to district development plans and this has to be intimated to
appropriate commission.

Rajiv Gandhi Gramin Vidyutikaran Yojana (RGGVY)

This scheme is being implemented by Rural Electrification Corporation for permitting stand
alone systems, rural electrification, bulk power purchase & management of local distribution
(through franchisee model). Under this scheme, projects could be financed with 90% capital
subsidy. For households below poverty line, 100% capital subsidy would be provided as per
norms of Kutir Jyoti Programme. Main provisions under this policy are to set up-
Rural Electricity Distribution Backbone (REDB): Provision of 33/11 KV (or 66/11 KV) sub-
stations of adequate capacity and lines in blocks where these do not exist.
Creation of Village Electrification Infrastructure (VEI): Electrification of un-electrified villages,
un-electrified habitations and provision of distribution transformers of appropriate capacity in
electrified villages/ habitation(s).
Decentralised Distributed Generation (DDG) and Supply: Decentralised generation cum-
distribution from conventional sources for villages where grid connectivity is either not feasible
or not cost effective provided it is not covered under the programme of Ministry of Non-
conventional Energy Sources for providing electricity from non-conventional energy sources
under their remote village electrification programme.
REDB, VEI and DDG would also cater to the requirement of agriculture and other activities
including irrigation pumpsets, small and medium industries, khadi and village industries, cold
chains, healthcare, education and IT. A total of 2,11,673 villages have been electrified among
which 1,19,708 previously electrified villages have been intensively electrified.
Policies supporting Off-grid renewable power
Remote Village Electrification Programme
This project covers all those villages that are not under RGGVY scheme. The decision for
choosing particular technology for power generation in such remote areas is taken by state
implementation agency after examination of technical feasibility and resource availability. The
projects are eligible for central financial assistance and developers can propose projects under
the format specified in the policy document. Out of 8722 villages sanctioned under this scheme,
6446 have been completed and 1705 villages under progress. And out of 2533 hamlets
sanctioned, 1587 have been completed.

Special Area Demonstration Project Programme

The Special Area Demonstration Project Scheme of the MNRE has been introduced with an
objective of demonstrating application of various Renewable Energy systems in a project mode
at places of National and international importance The SADP Scheme is being implemented into
two parts- Demonstration of Renewable Energy Systems at Prominent Places and the Energy
Park scheme. Prominent places of national and international importance are categorized under
world heritage sites, religious and educational institutions, tourist destinations, Zoos, museums,
National Parks etc. Renewable energy Park scheme started in 1995, having objectives of creating
awareness among rural and urban masses about the use and benefits of the renewable energy by
demonstrating new and renewable energy systems and devices through working systems, cut
models, LED models, blow ups etc. 30 State level renewable energy parks and 484 district level
Renewable Energy Parks have been sanctioned so far.

Renewable Energy Supply for Rural Areas

This scheme was framed with the objective of developing and demonstrating commercially
viable models for de-centralized energy supply in rural areas from renewable sources. The
implementation partners for the programme are: Ministry of New and Renewable Energy
(MNRE), National Thermal Power Corporation Limited (NTPC Limited) and Kirloskar Oil
Engines Limited. The partners are to frame out the business, governance and revenue models for
target areas. The project is under demonstration mode for 30 target villages in Chhattisgarh.

Renewable Energy for Urban, Industrial and Commercial Applications

The programmes implemented under this scheme are working for developing: Solar energy
systems and devices (including solar thermal and solar photovoltaic systems); Energy recovery
from urban, industrial and commercial wastes; and Bioenergy and cogeneration in industry.
 Under MNRE’s the Energy Efficient Solar/Green Buildings Programme, GRIHA rating system
is being promoted for a target of supporting 4 million sq.meter built up area during 11th Plan. So
far, 117 projects with 4.98 million sq.meter built up area with 81 projects from Government
Departments with 3.22 million sq. meter built up area have been registered for GRIHA
certification. An independent registered society ‘Association for Development and Research in
Sustainable Habitats’ (ADaRSH) for promotion and implementation of GRIHA rating system
has been set up in the country.
 Under “Development of Solar Cities Programme” the Ministry had proposed to support 60
cities/towns for Development as “Solar/ Green Cities” during the 11th Plan period with the aim
to promote the use of renewable energy in urban areas. At least one and a maximum of five cities
in a State is being supported. Systems that can be installed are: Solar street lights, Solar traffic
signals, Solar blinkers, Solar power packs/inverters, Solar illuminating hoardings/ Bill boards
and other systems of community use as felt necessary by Implementing Agencies.
 Under the Akshay Urja programme, shops are being established in each district to make
renewable energy products easily available to people and provide after sales and repair services.
The programme is in operation through State Nodal Agencies . Financial support in terms of soft
loans from designated banks and a maximum of 2.40 lakh as recurring grant/incentive for first
two years of operation from the Ministry is available for establishing such shops. Service Charge
is also provided to SNAs. A total of 294 shops in 31 States / UTs, (including 113 Aditya Solar
Shops) have been established under the scheme.
Know about the Central Schemes.
State Government
Three state governments: Rajasthan, Gujarat and Karnataka have come up with their separate
solar policy. Summary of three state’s solar policy is given here
State Gujarat Rajasthan Karnataka
2013 2017
150 200
PV MW MW
PV- 365MW 150 200
Target Thermal- 350MW ThermalMW MW 200MW (40MW annually)
Project PV: 5-10 MW; PV: 3-10 MW;

Capacity 2-25MW Thermal : 5-50 MW Thermal: Min 5 MW

Operative
Period 30/03/2014 31/03/2016
Sale of Power
Period 25 years 25 years 25 years
PV

Year1-12: Rs. 15.00/12.00

Year 13-25: Rs. 5.00/3.00

Thermal
Tariff based competitive
Sale of Power Year 1-12: Rs. 10.00/9.00 Year 13-25: Tariff based competitive bidding with base price @
Tariff Rs. 3.00/3.00 bidding Rs. 14.50 /kWh (max)
Power
Evacuation 66kV 33kV and above 11kV and above
Current PPAs signed for
Status about 1200 MW Allotment in progress Allotment in progress

Know about the State Schemes.

Other states are planning to bring up renewable energy policy, if not a specific solar policy.