To promote solar power for off-grid applications for both thermal as well as photovoltaic, the Government is offering financial support through a combination of 30 per cent subsidy and/or five per cent interest bearing loans for companies in the business.
The guideline on off-grid and decentralised solar applications released by the Ministry for New and Renewable Energy here on Wednesday to meet the targets set by the Jawaharlal Nehru National Solar Mission (JNNSM) lays down the funding pattern for such projects.
The funding pattern under the scheme would be in project mode and the total project cost would be financed through a mix of debt and incentives where the promoters’ equity contribution would be at least 20 per cent.
Under the scheme, off-grid solar PV systems up to a maximum capacity of 100 kWp per site and off-grid and de-centralised solar thermal applications would be eligible. For mini-grids for rural electrification applications up to a maximum capacity of 250 kW per site would be considered.
For 2010-11, the benchmark price for PV systems with battery back-up is considered as Rs 300 per Wp. In case of systems not using storage battery such as water pump systems, the installed PV system cost will be at a maximum of Rs 210 per Wp.
The guidelines also envisage soft loans for projects, including a component for working capital, to be made available to SME manufacturers of solar thermal systems and balance of systems manufacturers for solar PV (excluding battery manufacturers) through re-finance facility implemented through IREDA.
Capital subsidy
Capital subsidy of 90 per cent of the benchmark cost would be available for special category States – North-East, Sikkim, Jammu & Kashmir, Himachal Pradesh and Uttarakhand. In addition, it will be extended for setting up solar power plants/packs (both PV/thermal) in remote difficult areas such as Lakshadweep, Andaman & Nicobar Islands, and districts on the country’s international border. However, for funding solar thermal systems in these areas, the subsidy would be limited to 60 per cent for all categories of beneficiaries.
The interest subsidy under the scheme would be made available to NBFCs and scheduled commercial banks (excluding Regional Rural Banks) by way of re-finance from IREDA.
Channel partners — Renewable Energy Service providing companies, financial institutions including microfinance institutions acting as aggregators, financial integrators, system integrators and programme administrators — will be used for implementation of the scheme.
The guidelines for rooftop and other small solar power plants were also released. As regards rooftop PV and other small power plants connected to distribution network below 33 kv envisaged under the phase-I of the mission, the scheme is on generation-based incentives. The PPAs will be signed by the local utilities at a tariff determined by the appropriate State Electricity Regulatory Commission.
The enabling framework to promote grid connected solar power is expected to be unveiled by July.
Mr Deepak Puri, Chairman and Managing Director, Moser Baer India Ltd, said that, “The guidelines on off-grid and decentralised solar applications and rooftop and other small solar power plants issued by the Ministry is yet another positive announcement. By focusing on off grid and decentralised solar applications before on-grid application, the Government has sent a strong signal that India will be focusing on providing electricity from grassroots level and not just promote renewable or substitution of energy.”
