INDIA’S SOLAR POLICIES

History Minimum needs program (MNP) 1974-79:To cover at least 60% of villages in each state and union territory under the

rural electrification programme by 1990.However out of 46,464 villages achievement estimated at 34,489 villages.

Kutir jyoti scheme-1988-89:Launched for extending single-point light connections to households of Rural poor Families.

Definition of electrified village under the Ministry of Power 5th Feb 2014: The definition of an electrified village was changed(among other things) to at least 10% of the total number of households in the village being electrified.

Rajiv Gandhi G.rameen Vidyutikaran yojana April 2005: REC is the Nodal agency of the programme., under the programme 90% grant is provided by the central government and 10% as loan by the Rural Electrification Corporation.

Rural Electrification Policy 2006: (i)Access to electricity for all house holds by 2009.

(ii)Quality and Reliable power supply at reasonable rates.

(iii)Minimum 1 unit per household per day as a merit good by 2012.

Semiconductor policy 2007: (i)To encourage semiconductor and ecosystem manufacturing, of which solar PV compnt.

(ii) Capital subsidy of 20% for manufacturing plants in SEZ and 25% for outside SEZ.

Draft of NSM approved by prime minister 3rd August 2009: target of Generating 20,000 MW solar power by 2020.

JNNSM 14th Nov 2009: Release of mission document.

CERC announces Tariff for renewable Power Generation 3rd Dec 2009: Rs-18.44/kwh for solar PV and Rs-13.45/kwh for solar thermal projects commissioned in FY 2009-10.

Launch of JNNSM 11th Jan 2010:Mission targets 20,000 MW of solar generating by 2022.

JNNSM off-grid guidelines 17th June 2010: Guidelines for solar roof top off –grid and small power plants.

JNNSM grid connected guidelines 25th JULY 2010:Guidelines for selection of new grid-connected projects with CERC determined tariff of Rs-17.91/kwh for solar PV and Rs-15.31/kwh for solar thermal projects commisioned in 2010-11, 11-12.

CERC tariff 15th SEP 2010: Revised tariff for PPA singed after 31st march 2011 Rs15.39 /kwh, for solar thermal Rs-15.04/kwh.

Policy Guidelines of the National Solar Mission

Under The JNNSM, the target for grid-connected projects is 20,000 MW with a fifty-fifty share proposed for solar PV and concentrated solar thermal power.

JNNSM has adopted three phase approach

(i) Spanning the remaining period of the Eleventh Plan and first year of the Twelfth(up to 201-13) as phase 1.

(ii) Remaining four years of the Twelfth plan (2013-17) as Phase 2

(iii) Thirteenth Plan as Phase 3.

At the end of each plan there will be evaluation and review of progress capacity and targets for subsequent phases .

The Target for off-grid applications has been set at 1000 MW installed power by 2017 and 2,000 MW by 2022.

Application segment Policy Current status

as on

30/06/2010

JNNSM Targets

Phase 1

(2010-13)

Phase 2 (2013-

17)

Phase 3 (2017-

22)

Solar PV

Connected to HT > 33kv Generation-based

tariff=CERC-determined

tariff

12.28 MW 500MW 4,000-10,000

MW

20,000MW

Connected to HT(< 33kv)

Capacity of 100 KWp to

2MWp

GBI=Difference between

CERC & determined tariff

and base rate of

Rs5.50/kwh for fy 2010-11

base ratewill be escalated

annually by 3%

- 90 MW

Connected to LT(400V for 3-

Phase or 230V for 1-phase).

Capacity < 100 KWp.

- 10 MW

CSP Connected to HT (>33kv) GBI=CERC-determined tariff - 500 MW

Off-grid solar applications

Solar lanterns Soft loan @5% p.a capital

subsidy:

1)Rs 70/Wp(no battery)

2)Rs 90/Wp(with battery)

3)Rs 150/Wp for micro grid

(with battery)

797,344 nos

200 MW

1,000 MW 2,000 MW

Solar PV home lighting

systems

603,307 nos

Solar PV streetlights 119,634 nos

Solar PV irrigation pumps 7,334 nos

Off-grid solar PV (micro grid) 2.92 MWp

Solar thermal application Solar thermal collectors

(million m2)

Soft loan @ 5% p.a capital

subsidy: 30% benchmark

cost

3.53*

7 15 20

Current Status and Targets set by the JNNSM

Schematic of the Operational Framework

JNNSM Policy Framework for Grid-connected Solar Projects

Policy Framework:

CERC regulations,2009.Determinatio of capital cost norms for solar PV projects (FY 2010-11,2011-12) and solar thermal (FY 2010-11,2011-12,2012-13).

Guidelines for selection of new grid-connected solar projects under phase1 of JNNSM.

Guidelines for migration of existing under-development grid-connected solar projects from existing arangements to JNNSM.

Rationale for bundling:

To reduce the tariffs paid by the DISCOMs by averaging the cost of generation of solar power and inexpensive coal-based generation as per CERC order.

Tariff determination for PPA(CERC):

Single part tariff structure consisting of fixed cost components Return on equity

Interest on loan capital

Depreciation

Interest on working capital

Operation and maintenance expenses

Tariff period will be twenty-five years

Selection Of SPDs

Renewable Energy Certificates

Rationale for REC’s: SERCs are mandate to set the RPOs for each state.

Policy framework:

The National Tariff Policy 2006 requires SERCs to allocate a minimum percentage of the

power purchased by distribution utilities to be sourced from renewable.

CERC regulation on RECs, January 2010, provides a framework to institutinalise RECs.

Principle Of RECs: Renewable energy has two components, plain

electricity and the green nature of the generation.

An renewable energy power generator can choose to sell the power to the local utility at

normal tariff and sell the REC separately.

For solar there will be solar –specific RPOs stipulated.

Operational frame work for REC’s

Photovoltaic Policies

The Target set for Phase I of 500 MW of Utility-scale solar PV are sliced in different ways as a means of illustrating societal and budgetary impacts.

Off-Grid Targets

Off- grid applications for rural electrification should be prioritized considering economic sense. As kerosene is more expensive which is used in many house holds for lighting.

The mission Targets 200 MW by 2013 and 2,000 MW by 2022.

A capital subsidy of Rs 150/Wp is available for rural microgrids as against Rs 90/Wp for other applications.

Providing 5.5 million households each with 37 W panels. Providing 4000 villages with 50 KWp microgrids will work out to be 200 MW.

Solar-based microgrids offer a competitive solution compared to grid extension.

Policies for Grid-connected Solar power

Distribution companies have raised concern among developers andpossibility of loans to solar projects.

Clear long term policy mechanisms in place to ensure that interest insolar investment remains.

It is necessary to clearly define the objectives and possible ways andmechanism to buy solar power in phase 2 and 3 because targets alonewill not lead to any of the prerequisites for reduction in the cost of solarpower.

Assessing financing needs and possible sources of funding the solarmission, including international support.

A target driven R&D policy for developing indigenous solartechnologies.

An aggressive initiative on HRD to ensure adequate availability ofmanpower for ground-related as well as high-level research work.

Bundling of power

With shortage of power in the country, It is unclear where this ‘unallocated quota’ used for bundling of power comes from , limitations are.

Some of the states were receiving this unallocated quota will not be able to get it any more, worsening their power situation.

Even if it is presumed that the bundling would work well for the first phase and higher commitments can be ascertained from DISCOMs, that provides no clarity on the quatum of unallocated quota available or to be available for second and third phases.

Currently SERCs have the power to mandate RPOs, which is the proportion of total power purchased from renewables by distribution companies.

Central intervention is a must, otherwise states may not set up the solar-specific RPOs.

Legislation on renewable energy would be of great help if the targets under the NSM in particular and the National Action Plan on climate change(NAPCC) (15% by 2022) in general are to be met.

Solar Thermal Policies

The capital subsidy provided by the MNRE by all accounts is sufficient to make solar thermal technology attractive. Even so, the adoption of solar thermal applications is low.

Use of this technology substantially reduce fossil fuel consumption in the domestic and industrial sectors, which would result in a considerable reduction in annual CO2 emissions.

There is a severe dearth of statistics on the techno-economics of thermal applications.

Various important steps for increase in adoption of solar thermal technologies.

Current MNRE policy is providing 15% of the normative capital cost before it was 30%

Normative capital cost and subsidy is revised annually .

Soft loans are available at 5% interest rate.

MNRE The Government encourages setting up of solar power projects through various

measures like:-

(i)Grant of subsidy on off-grid applications.

(ii)Provision for renewable purchase obligation for solar has been made in theNational Tariff Policy.

(iii)Concessional Import duty/Excise duty exemption for setting up of solarpower plants, accelerated depreciation and tax holiday.

(iv)Generation based incentive and facility for bundled power for Gridconnected Solar Power Projects through various interventions announcedfrom time to time.

(v)Several R&D efforts have been initiated for new technologies andimprovement in efficiency.

Government of India has accorded in-principle approval for setting upSolar Parks in the State of Gujarat, Andhra Pradesh, Uttar Pradesh,Meghalaya, Rajasthan, Madhya Pradesh, Tamil Nadu, Karnataka,Punjab and Telangana. Projects under Central/State Schemes shallcome up in these Solar Parks.

The Union Cabinet chaired by the Prime Minister, Shri Narendra Modi, March 2nd 2015 gave its approval for the implementation of the scheme for setting up of 15,000 MW of Grid-connected Solar PV Power projects under the National Solar Mission through NTPC/ NTPC Vidyut VyaparNigam Limited (NVVN) in three tranches namely,

3000 MW under Tranche-l under mechanism of Bundling with Unallocated Coal based Thermal Power and fixed levellised tariffs.

5,000 MW under Tranche-ll with some support from Government to be decided after getting some experience while implementing Tranche-l and balance 7,000 MW under Tranche-Ill without any financial support from the Government.

The first Phase of the National Solar Mission (2010-2013) had a target of 1100 MW for Grid-connected solar power generation capacity, against which 1685 MW was set up in the country under various schemes. Further capacity addition of 9,000 MW comprising 3,000 MW under Central schemes and 6,000 MW under State initiatives/ other mechanisms was envisaged In the 2nd phase of the Mission (April 2013-March 2017).

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