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Summer Internship Report

On

COMPARITIVE STUDY OF SOLAR POLICIES OF


INDIA AND ABROAD& MODEL SOLAR POLICY
FOR MAHARASHTRA
AND
FINANCIAL MODELING OF A SOLAR PV PLANT
UNDER THE GUIDANCE OF

Mrs. Manju Mam, Director(MS),

CAMPS, NPTI, Faridabad

&

Mr. Vijay L. Sonavane, Member (Technical)

MERC, Mumbai

Submitted By:

Anish Kumar Deb

NPTI, MBA Power Management

(Under Ministry of Power, Govt. of India)

Maharishi Dayanand University, Rohtak

August 2013
COMPARITIVE STUDY OF SOLAR POLICIES

DECLARATION

I, Anish Kumar Deb, Roll no. 14 / Semester 3rd / Class of 2012-14 of the MBA (Power

Management) of the National Power Training Institute, Faridabad hereby declare that the

Summer Training Report entitled:

COMPARITIVE STUDY OF SOLAR POLICIES OF


INDIA AND ABROAD& MODEL SOLAR POLICY
FOR MAHARASHTRA
AND
FINANCIAL MODELING OF A SOLAR PV PLANT
is an original work and the same has not been submitted to any other Institute for the award

of any other degree.

A Seminar presentation of the Training Report was made on .. and the

suggestions as approved by the faculty were duly incorporated.

Presentation In charge Signature of Candidate


(Faculty)

Countersigned

Director/Principal of the Institute


COMPARITIVE STUDY OF SOLAR POLICIES

ACKNOWLEDGEMENT
Learning experience is like no other, but to learn one seeks a teacher, a guide,
and I found all of these in MR. Vijay L. Sonavane (MEMBER MERC) who were
my project guide during my stay at MAHARASHTRA ELECTRICITY REGULATORY
COMMISION.

I would also like to thank MR. Anant Sant (DY DIRECTOR, TECHNICAL, MERC)
for the valuable teachings, Sir the inputs given by you will always be with me.

I also express gratitude towards MRS. Sarita Thakur (DY DIRECTOR,


ADINISTRATION AND FINANCE, MERC)for coordinating administrative
activities and other efforts.

I would like to thank MR. Amit Chilwe (REGULATORY OFFICER, MERC) who
helped me throughout my learning of each and every aspect. His guidance and
support made the learning easy and enjoyable.

I take this opportunity to express my sincere thanks to MRS. Megha Singhal


(REGULATORY OFFICER(FINANCE), MERC)who helped me and supported me
an guided me.

I would like to each and every person in MERC who helped me and
contributed in my project.

I also extend my thanks to all the faculty members and my batch


mates in CAMPS (NPTI), for their support throughout the course of
internship.

THANK YOU ALL.


COMPARITIVE STUDY OF SOLAR POLICIES
EXCECUTIVE SUMMARY

It is a known fact that Sun is the ultimate source of energy and mankind has been
harnessing Suns energy ever since the dawn of civilization. In modern era electricity has
become fundamental need of every human-being and the demand of it is rising by the day.

The world has awakened towards the need of alternate sources of electricity; hence almost
all major countries are coming up with policies to attract investors and industrialists. A study
of federal policies, regulations and incentives given in countries namely GERMANY, ITALY,
CHINA, UNITED STATES, JAPAN, FRANCE, AUSTRALIA and UNITED KINGDOM was done
during the training period.

To unite the effort towards reducing environmental pollution, nations united and formed
Kyoto protocol in which inter-country methods were designed to fulfil the binding target
set.

This report contains the provisions and important statements in the Indian federal
legislative documents relating to solar/renewable energy.

Comparative study of rules, regulations, policies and tariff components related to solar
technologies has been done of the states of India namely GUJARAT, RAJASTHAN,
KARNATAKA, MADHYA PRADESH, ANDHRA PRADESH, TAMIL NADU and CHATTISGARH.

Pros and Cons of state policies and regulations are mentioned from a developers point of
view after comparing them on the basis of parameters namely eligible producer, land
allotment, operative period, sale of power and tariff, wheeling, banking of electricity,
power, evacuation & grid interfacing and incentives & general.

The project proceeds with MERC initiative to develop solar power in Maharashtra. A model
solar policy is been prepared during the training period which may be helpful to encourage
more and more solar power generators across the state of Maharashtra.

Last but not the least a financial modelling of a Solar PV plant has been prepared for a
capacity of 1MW to determine various financial indicators i.e. IRR, NPV, DSCR and various
other parameters has been taken in to account for the project viability of a Solar PV plant.
COMPARITIVE STUDY OF SOLAR POLICIES

Contents
1. GLOBAL SOLAR POWER SCENARIO ................................................................................................. 1
2. COUNTRY WISE SOLAR POWER INSTALLATIONS ACROSS THE WORLD .......................................... 1
3. LEGISLATION EVOLVEMENT TO PROMOTE RENEWABLE ENERGY INCLUDING SOLAR POWER ..... 3
3.1 UNITED NATIONS FRAMEWORK CONVENTION ON CLIMATE CHANGE ........................................ 3
3.2 KYOTO PROTOCOL ........................................................................................................................ 3
4. POLICIES ADOPTED BY DIFFERENT COUNTRIES TO DEVELOP SOLAR POWER GENERATION.......... 4
4.1 GERMANY...................................................................................................................................... 4
4.2 ITALY.............................................................................................................................................. 5
4.3 CHINA ............................................................................................................................................ 6
4.4 UNITED STATES ............................................................................................................................. 7
4.5 JAPAN ............................................................................................................................................ 8
4.6 FRANCE.......................................................................................................................................... 9
4.7 AUSTRALIA .................................................................................................................................. 10
4.8 UNITED KINGDOM ...................................................................................................................... 11
5. INDIAS SOLAR POWER SCENARIO ................................................................................................ 12
6. LEGISLATION EVOLVEMENT TO PROMOTE RENEWABLE ENERGY INCLUDING SOLAR POWER ... 13
6.1 ELECTRICITY ACT 2003 ................................................................................................................ 13
6.2 NATIONAL ELECTRICITY POLICY 2005 (NEP)................................................................................ 14
6.3 NATIONAL TARIFF POLICY 2006 (NTP) ........................................................................................ 14
6.4 NATIONAL ACTION PLAN ON CLIMATE CHANGE ........................................................................ 14
7. JAWAHARLAL NEHRU NATIONAL SOLAR MISSION ....................................................................... 16
8. REC MECHANISM OVERVIEW:....................................................................................................... 20
9. OPERATIONAL FRAMEWORK OF REC MECHANISM ...................................................................... 21
10. STATE WISE RPO (SOLAR & NON SOLAR) .................................................................................. 22
11. STATEs SOLAR POLICIES ............................................................................................................ 24
11.1 GUJARAT SOLAR POLICY 2009................................................................................................... 24
11.2 RAJASTHAN SOLAR POLICY 2011 .............................................................................................. 26
11.3 KARNATAKA SOLAR POLICY....................................................................................................... 31
11.4 MADHYA PRADESH SOLAR POLICY 2012................................................................................... 33
11.5 ANDHRA PRADESH SOLAR POLICY 2012 & FIRST AMENDMENT .............................................. 37
COMPARITIVE STUDY OF SOLAR POLICIES
11.6 TAMIL NADU SOLAR POLICY 2012............................................................................................. 39
11.7 CHATTISGARH SOLAR POICY 2012-17 ....................................................................................... 42
12. CONCLUSION ............................................................................................................................. 44
13. MAHARASHTRA STATE SOLAR POWER SCENARIO.................................................................... 45
14. LEGAL EVOLVEMENT TO PROMOTE RENEWABLE ENERGY INCLUDING SOLAR POWER .......... 46
15. MERC INITIATIVE TO DEVELOP RENEWABLE ENERGY .............................................................. 46
15.1 Renewable Purchase Obligation ............................................................................................... 46
15.2 Renewable Tariff ....................................................................................................................... 47
16. MAHARASHTRA MODEL SOLAR POLICY .................................................................................... 48
17. FINANCIAL MODELLING (SOLAR PV PLANT) .............................................................................. 54
1. GLOBAL SOLAR POWER SCENARIO
Solar energy has experienced an impressive technological shift. While early solar
technologies consisted of small-scale photovoltaic (PV) cells, recent technologies are
represented by solar concentrated power (CSP) and also by large-scale (PV) systems that
feed into electricity grids. The costs of solar energy technologies have dropped substantially
over the last 30 years.

The rapid expansion of the solar energy market can be attributed to a number of supportive
policy instruments, the increased volatility of fossil fuel prices and the environmental
externalities of fossil fuels, particularly greenhouse gas (GHG) emissions.

Germany is the world's top photovoltaic (PV) installer, with a solar PV capacity as of
December 2012 of more than 32.5 gigawatts (GW).The German new solar PV installations
increased by about 7.6 GW in 2012, and solar PV provided 18 TWh (Trillion kilowatt-hours)
of electricity in 2011, about 3% of total electricity. Some market analysts expect this could
reach 25% by 2050.

The overall capacity installation across the world has increased from 39.78 GW in 2010 to
102.024 GW in 2012.

It is visible that though energy usage from renewables is increasing but still the majority of
energy is supplied by fossil fuels and there is a long time before world becomes
independent from fossil-fuel usage. There is a need of continuous improvement and
implementation of renewable technologies.

2. COUNTRY WISE SOLAR POWER INSTALLATIONS ACROSS THE


WORLD

COUNTRY 2010(MW) 2011(MW) 2012(MW)


GERMANY 17320 24875 32509
ITALY 3502 12764 16987
CHINA 893 3093 8043
UNITED STATES 2519 4383 7665
JAPAN 3617 4914 6704
FRANCE 1025 2831 3843
AUSTRALIA 504 1298 2291
UNITED KINGDOM 72 1014 1831
INDIA 189 461 1686
REST OF WORLD 10137 14051 20465
TOTAL 39778 69684 102024
COMPARITIVE STUDY OF SOLAR POLICIES
35000
30000
25000
20000
15000 2010(MW)
10000
2011(MW)
5000
2012(MW)
0

The 370 MW Ivanpah Solar Power Facility, located in California's Mojave Desert, is the
worlds largest solar thermal power plant (SINGLE TOWER TYPE) project currently under
construction.

The Solana Generating Station is a 280 MW solar power plant which is under construction
about 70 miles (110 km) southwest of Phoenix, Arizona.
COMPARITIVE STUDY OF SOLAR POLICIES
3. LEGISLATION EVOLVEMENT TO PROMOTE RENEWABLE ENERGY
INCLUDING SOLAR POWER

3.1 UNITED NATIONS FRAMEWORK CONVENTION ON CLIMATE CHANGE


In 1992, countries joined an international treaty, the United Nations Framework Convention
on Climate Change, to cooperatively consider what they could do to limit average global
temperature increases and the resulting climate change, and to cope with whatever impacts
were, by then, inevitable. By 1995, countries realized that emission reductions provisions in
the Convention were inadequate. They launched negotiations to strengthen the global
response to climate change, and, two years later, adopted the Kyoto Protocol. The Kyoto
Protocol legally binds developed countries to emission reduction targets. The Protocols first
commitment period started in 2008 and ends in 2012. Till date there are total 195 parties.

3.2 KYOTO PROTOCOL


The Kyoto Protocol was adopted in Kyoto, Japan, on 11 December 1997 and entered into
force on 16 February 2005. The detailed rules for the implementation of the Protocol were
adopted at COP 7 in Marrakesh in 2001, and are called the Marrakesh Accords. In Kyoto
protocols three mechanisms namely emission trading, clean development mechanism
(CDM) and Joint implementation (JI) with targets for reduction in overall GHG emissions
were stated and accepted by the parties (nations).

India acceded to the Kyoto Protocol in August 2002 and one of the objectives of acceding
was to fulfill prerequisites for implementation of Clean Development Mechanism projects,
in accordance with national sustainable priorities, where-under, a developed country would
take up greenhouse gas reduction project activities in developing countries. MoEF is
pursuing capacity building projects with GTZ (Gesellschaft fr Technische Zusammenarbeit),
UNDP (United Nations development programme) and ADB (Asian Development Bank). CDM
is explained in detail in the later part of this report.
COMPARITIVE STUDY OF SOLAR POLICIES
4. POLICIES ADOPTED BY DIFFERENT COUNTRIES TO DEVELOP
SOLAR POWER GENERATION

4.1 GERMANY

SOLAR INSTALLED CAPACITY IN MW


35000 32643
30000 25039
25000
20000 17554
15000 10566 INSTALLED CAPACITY
10000 6120
4170
5000
0
2007 2008 2009 2010 2011 2012

In the electricity sector, as of July 2010, feed-in tariffs for solar PV have been lowered
substantially while the incentive for auto-consumption (captive) was increased.

Feed-in Tariffs in c/kWh


Installations not attached to a building Installations attached to a building
Agricultural Sealed or Certain 30 kW >30 kW >100 kW >1,000
land Conversion other land and 100 and 1,000
Kw
land kW kW
0.0 22.07 21.11 28.74 27.33 25.68 21.56

In addition, the degression rates where increased for 2011 and a flexible breathing cap
was introduced in order to adapt the degression rates to PV market development.

Different additional benefits are granted for certain characteristics, such as innovative
technology, the fulfilment of sustainability criteria, auto-consumption or high efficiency.
New installations are supported at different rates to modernized or retrofitted installations.

Investment costs for commercial systems (incl. Planning and installation) can be depreciated
over a 20 year period and other costs can be considered as operations cost

Commercial systems are VAT exempted (VAT is at 19% in Germany)

In exceptional cases for some commercial systems which operate closely to


producing or manufacturing facilities 12.5-27.5 % of investment can be claimed as tax credit.
COMPARITIVE STUDY OF SOLAR POLICIES
4.2 ITALY

SOLAR INSTALLED CAPACITY IN MW


20000
16361
15000 12783

10000
INSTALLED CAPACITY

5000 3470
432 1144
87
0
2007 2008 2009 2010 2011 2012

Feed-in tariffs (15 years) for electricity produced by renewable energy plants with a
maximum power output of 1 MW (0.2 MW for wind energy), as an alternative to the green
certificates;

An incentive scheme (Conto Energia) for photovoltaic and solar thermodynamic plants
through the feed-in premium mechanism.This defines a premium for PV production
differentiated by size and level of architectural integration. The premium is constant for 20
years. The electricity produced can be used for own consumption, sale, or exchange with
the network (net metering up to 200 kW installed capacity). The initial premiums of 2007
have been reduced by 2% per year, and will be reduced by a further 2% for plants beginning
production in 2010.

An obligation has been introduced to install PV on new buildings: A minimum of 1 kW for


each residential unit has to be covered by RES and 5 kW in industrial buildings larger than
100 m2.

Electricity suppliers can fulfil their obligation using tradable Green Certificates, issued by
GSE, the body in charge of collecting resources from electricity suppliers and giving them to
the producers.The quota had an annual increase of 0.35%, from 2004 to 2006, and of 0.75%
from 2007 to 2012, though a change in the support system is expected in 2011.

Italys Conto Energia V solar incentive programme will expire on 6 July 2013 having reached
its cap of 6.7 billion and therefore cease any further investment into solar power.
COMPARITIVE STUDY OF SOLAR POLICIES
4.3 CHINA

SOLAR INSTALLED CAPACITY IN MW


10000
8300
8000

6000

3300 INSTALLED CAPACITY


4000

2000 800
100 140 300
0
2007 2008 2009 2010 2011 2012

Chinese government has employed most internationally recognized policies to stimulate the
development of renewable energies, e.g., mandatory renewable portfolio standards,
subsidies, special development funds, feed-in tariff, tax credits and etc.

Renewable Energy Law of Peoples Republic of China was first launched in 2006, followed
by Medium and long term development plan for renewable energy development and then
The eleventh five-year plan for renewable energy development in 2008. According to
these programs andregulations, the proportion of renewable energy in Chinas primary
energy consumption will be increased to 10% by 2010, and 15% by 2020.

The subsidys upper limit was set at 20 Yuan/Wp for the year of 2009, which can cover 30-
50% the production cost of the manufactures. This can be interpreted as a strong policy
driver for solar energy utilization, especially PV utilization.

Golden Sun Project aiming at accelerating the PV industries was launched in July, 2009.
The subsidies can go as high as 50% of the initial investments for the on-grid electricity and
its dispersion systems, 70% for the independent electricity generating system for the
remote areas.

If a national FIT policy for utility scale-solar plants is adopted, it is predicted that this new
type of solar policy will drive much faster growth in the Chinese solar market as compared
to Chinas existing roof-top subsidy and Golden Sun program, which focuses on remote
off-grid installations. It is expected that the tariff will fall between US $0.16 and US $0.22
per kilowatt hour of electricity produced at large-scale photovoltaic arrays.
COMPARITIVE STUDY OF SOLAR POLICIES
4.4 UNITED STATES

SOLAR INSTALLED CAPACITY IN GW


5000
4342
4000

3000

1818 INSTALLED CAPACITY


2000
1212
864 891
1000 612

0
2007 2008 2009 2010 2011 2012

US proposed a mix of incentives that includes government-guaranteed loans, a mandatory


solar portfolio standard for electric utilities, and a solar price support program for a feed in
tariff (FIT).

In the first 5-year round of solar deployment, the FIT subsidy levels are $0.11/kWh for CSP ,
$0.11/kWh for PVCAES, and $0.2/kWh for distributed PV. The FIT subsidy levels are
reduced in the second 5-year round of solar deployment to $0.07/kWh for CSP, $0.03/kWh
for PVCAES, and$0.1/kWh for distributed PV. The FIT subsidies are paid over the entire 30-
year capital recovery period.

Section 204 of EP Act 2005 establishes a photovoltaic (PV) energy commercialization


program for the procurement and installation of PV systems in public and federal buildings.
It requires the installation of 20,000 solar-energy systems on federal buildings by 2010, as
contained in the federal Million Solar Roof Initiative (MSRI) of 1997. The commercialization
program has been appropriated $50 million annually for fiscal years 20062010, until funds
are expended. An evaluation program has been appropriated $10 million annually for fiscal
years 2006-2010, until funds are expended.

The Property Tax Exemption for Solar Systems is a product of the California Revenue and
Taxation Code, section 73. Active solar energy systems installed between January 1, 1999
and January 1, 2006 are not subject to property taxes when assessing property for property
tax purposes.
COMPARITIVE STUDY OF SOLAR POLICIES
4.5 JAPAN

INSTALLED CAPACITY IN MW
8000
7000
7000
6000
4914
5000
4000 3618
INSTALLED CAPACITY
3000 2627
1919 2144
2000
1000
0
2007 2008 2009 2010 2011 2012

In December 2008, the Ministry of Economy, Trade and Industry announced a goal of 70% of
new homes having solar power installed, and would be spending $145 million in the first
quarter of 2009 to encourage home solar power.

The government enacted a feed-in tariff on November, 2009 that requires utilities to
purchase excess solar power sent to the grid by homes and businesses and pay twice the
standard electricity rate for that power.

On June 18, 2012, a new feed-in tariff was approved, of 42 Yen/kWh, about 0.406 Euro/kWh
or USD 0.534/kWh. The tariff covers the first ten years of excess generation for systems less
than 10 kW, and generation for twenty years for systems over 10 kW. It became effective
July 1, 2012. In 2013, Japan is expected to install 5-9 GW of solar power.

In July, 2012, Japan's Ministry of Economy, Trade and Industry (METI) introduced a
restructured feed-in tariff in order to spike investments in large-scale renewable energy and
photovoltaic. Market segmentation and development in Japan are anticipated to change
significantly in the near future, with residential market share projected to fall sharply by
2013 and shift towards commercial, industrial, and small and large utility markets. These
sectors are expected to grow quickly through 2016, creating more room for foreign
manufacturers.
COMPARITIVE STUDY OF SOLAR POLICIES
4.6 FRANCE

INSTALLED CAPACITY IN MW
4500 4027.6
4000
3500
2948.6
3000
2500
2000 INSTALLED CAPACITY
1500 1197.3
1000
500 289.3
98.2 103.9
0
1 2 3 4 5 6

The support scheme for PV projects was largely modified in December 2010. A clear
distinction between projects under 100kWp and projects above 100kWp has been made.
The impact is particularly important for large installation above 100kWp.

The government justifies this change by the fact that France is well on track on the
development of its solar portfolio, and that the industry has reached a satisfying inertia. The
government therefore now aims at stabilizing the yearly installation rate at 500MW (against
expected yearly installation rates of 1000MW to 1500MW between 2011 and 2012).

Large installations, above 100kWp, are not eligible for the feed-in tariff anymore. For
smaller installations, the tariff has been reduced progressively from December 2009, and
three categories have been created: integrated PV, partially integrated PV and ground based
installations.

As of January 1, 2011, larger projects (above 100kWp), or ground based projects will benefit
from a reduced feed-in tariff (120/MWh against a previously existing tariff of 328 /MWh).

Full integration of PV panels requires the panels to take a vital role in the structure of the
building (e.g.watertightness). A partially integrated installation requires panels to be fixed
on an existing building. For these installations tariffs range from 460 /MWh to
288.5/MWh. The table below details the different feed-in-tariffs.
COMPARITIVE STUDY OF SOLAR POLICIES
4.7 AUSTRALIA

SOLAR INSTALLED CAPACITY IN MW


2500 2291

2000

1500 1298
INSTALLED CAPACITY
1000
504
500 330
100 170
0
2007 2008 2009 2010 2011 2012

An Expanded Renewable Energy Target was passed by the Australian Parliament on 20


August 2009, to ensure that renewable energy obtains a 20% share of electricity supply in
Australia by 2020. To ensure this the Federal Government has committed that the MRET will
increase from 9,500 gigawatt-hours to 45,000 gigawatt-hours by 2020.The scheme lasts
until 2030.

The Australian Government provided a rebate program that offered up to A$8,000 rebates
for installing solar panels on homes and community use buildings (other than schools),
through the Solar Homes and Communities Plan.The Solar Flagships program sets aside $1.6
billion for solar power.

Schools were eligible to apply for grants of up to A$50,000 to install 2 kW solar panels and
other measures through the National Solar Schools Program beginning 1 July 2008, which
replaced the Green Vouchers for Schools program. Applications for the program ended 21
November 2012. A total of 2,870 schools have installed solar panels. The output of each
array can be viewed, and compared with that of up to four other schools.

Feed in tariffs were introduced by a number of states to increase the amount of solar PV
power generated. They can be classified by a number of factors including the price paid,
whether it is on a net or gross export basis, the length of time payments are guaranteed, the
maximum size of installation allowed and the type of customer allowed to participate. Many
Australian state feed-in tariffs were net export tariffs, whereas conservation groups argued
for gross feed-in tariffs. In March 2009, the Australian Capital Territory (ACT) started a solar
gross feed-in tariff. For systems up to 10 kW the payment was 50.05 cents per kWh. For
systems from 10 kW to 30 kW the payment was 40.04 cents per kWh. The payment was
revised downward once before an overall capacity cap was reached and the scheme closed.
Payments are made quarterly based on energy generated and the payment rate is
guaranteed for 20 years.
COMPARITIVE STUDY OF SOLAR POLICIES
4.8 UNITED KINGDOM

SOLAR INSTALLED CAPACITY IN MW


1800 1655
1600
1400
1200 1014
1000
800 INSTALLED CAPACITY
600
400
200 18.1 22.5 26.5 71.5
0
2007 2008 2009 2010 2011 2012

The primary support mechanism for Renewable energy development in the UK is the
Renewables Obligation (RO), a quota system with tradable green certificates known as
Renewables Obligation Certificates (ROCs).

The RO is periodically revised. The RO was introduced in England, Wales and Scotland in
April 2002 and in April 2005 in Northern Ireland. The scheme was originally set to run until
March 2027. In 2010, the previous Government administration extended the scheme until
2037 However in December 2010 the new Coalition Government proposed in the Electricity
Market Reform (EMR).

From April 2010, plants under 50kW will no longer qualify for support under the RO, but are
instead eligible for support under the recently introduced FIT scheme. Maximum size limits
are in place for specific technologies.

Innovative funding programme has budget of 200 million pounds, of which 160 million have
been allocated to various schemes. Funding help is provided to innovators / Entrepreneurs
who develop and demonstrate low carbon technologies.They will be able to apply for 1
million pounds funding from government and can use that funding to leverage additional
funds from private sector investors. They will also be able to get support from experts on
how to bring their products to market. Of the 35 million, 20 million will initially support
energy efficiency technologies and 15 million will expand the call into power generation at
later stage.
COMPARITIVE STUDY OF SOLAR POLICIES
5. INDIAS SOLAR POWER SCENARIO

India is densely populated and has high solar insolation, an ideal combination for using solar
power in India. Considering, Global perspective,India is 5th largest contributor in wind
energy sector. In the solar energy sector, some large projects have been proposed, and a
35,000 km2area of the Thar Desert has been set aside for solar power projects, sufficient to
generate 700 GW to 2,100 GW.

With about 300 clear, sunny days in a year, India's theoretical solar power reception, on
only its land area, is about 5000 Petawatt-hours per year (PWh/yr) (i.e. 5000 trillion kWh/yr
or about 600 TW). The daily average solar energy incident over India varies from 4 to 7
kWh/m2 with about 15002000 sunshine hours per year (depending upon location), which
is far more than current total energy consumption. Assuming the efficiency of PV modules
were as low as 10%, this would still be a thousand times greater than the domestic
electricity demand projected for 2015.

According to a 2011 report by BRIDGE TO INDIA and GTM Research, India is facing a perfect
storm of factors that will drive solar photovoltaic (PV) adoption at a "furious pace over the
next five years and beyond".

The falling prices of PV panels, mostly from China but also from the U.S., has coincided with
the growing cost of grid power in India. Government support and ample solar resources
have also helped to increase solar adoption, but perhaps the biggest factor has been need.
India, "as a growing economy with a surging middle class, is now facing a severe electricity
deficit that often runs between 10 and 13% of daily need.

SNO STATE INSTALLED CAPACITY(MW)


1 ANDHRA PRADESH 21.8
2 CHATTISGARH 4.0
3 DELHI 2.5
4 GUJARAT 654.8
5 HARYANA 7.8
6 JHARKHAND 4.0
7 KARNATAKA 9.0
8 MADHYA PRADESH 2.0
9 MAHARASHTRA 20.0
10 ORISSA 13.0
11 PUNJAB 9.0
12 RAJASTHAN 510.25
13 TAMIL NADU 15.0
14 UTTAR PRADESH 12.0
15 UTTARAKHAND 5.0
16 WEST BENGAL 2.0
TOTAL 1686.44
COMPARITIVE STUDY OF SOLAR POLICIES
700
600
500
400
300
200
100
0

6. LEGISLATION EVOLVEMENT TO PROMOTE RENEWABLE ENERGY


INCLUDING SOLAR POWER

6.1 ELECTRICITY ACT 2003


Electricity Act 2003 is considered the most transformational and dynamic act till date. The
main focus of act was on de-bundling of the electrical utilities, but it also included guidelines
for renewable energy.

SECTION 4

The National policy on stand-alone system shall include renewable sources.

SECTION 61 (h)

The section states that while specifying term and conditions of tariff determination
the commission shall consider the promotion of generation from renewable sources
of energy along with other factors.

SECTION 86 (1) (e)

The section states that state commission shall promote generation of electricity from
renewable sources of energy and also tells that it shall be done by providing suitable
measures for connectivity with the grid and sale of electricity to anyone. A
percentage of total consumption in distribution licensees area shall be satisfied from
renewable sources specified by the commission.
COMPARITIVE STUDY OF SOLAR POLICIES
6.2 NATIONAL ELECTRICITY POLICY 2005 (NEP)
Section 5.2
This section states the importance of hydro power by notifying hydroelectricity as a
clean and renewable source of energy. The section states that in upcoming time
maximum emphasis would be laid on the full development of the feasible hydro
potential in the country. It emphasises the importance of harnessing hydro potential
for economic development and also reinforces governments commitment to cater
huge capital requirements by making policy that will help debt-financing of viable
projects. The section also talks about safeguarding environmental concerns &
concerns of the families affected due to the projects through proper implementation
of National Policy on Rehabilitation and Resettlement (R&R) and by suitable
mechanism for monitoring of implementation of Environmental Action Plan.

Section 5.12
The section states that there is urgent need to promote energy generation from
renewable sources of energy because of their environmental friendliness. Efforts
must be directed to reduce the capital cost of these projects. It also states that the
share of electricity from non-conventional sources through competitive bidding
would need to be increased as prescribed by State Electricity Regulatory
Commissions and the Commission may determine an appropriate differential in
prices to promote these technologies.

6.3 NATIONAL TARIFF POLICY 2006 (NTP)


Section 6.4
The section states that in present stage the conventional and non-conventional
technologies cannot compete at similar tariff and hence the power shall be procured
from non-conventional sources at preferential tariff determined by the appropriate
commission but it also states that in long term the non-conventional technologies
have to compete with other sources in terms of full cost. It also states that
appropriate commission will fix the minimum percentage of power to be procured
from non-conventional sources with reference to section 86 (1) of electricity act
2003.

6.4 NATIONAL ACTION PLAN ON CLIMATE CHANGE


On June 30, 2008, Honourable Prime Minister Manmohan Singh released Indias first
National Action Plan on Climate Change (NAPCC) outlining existing and future policies and
programs addressing climate mitigation and adaptation.

The plan identifies eight missions under National Missions running through 2017 and
directs ministries to submit detailed implementation plans to the Prime Ministers Council
on Climate Change by December 2008.
COMPARITIVE STUDY OF SOLAR POLICIES
Emphasizing the overriding priority of maintaining high economic growth rates to raise living
standards, the plan identifies measures that promote our development objectives while
also yielding co-benefits for addressing climate change effectively.

It says these national measures would be more successful with assistance from developed
countries, and pledges that Indias per capita greenhouse gas emissions will at no point
exceed that of developed countries even as we pursue our development objectives.

NATIONAL MISSIONS

National Solar Mission


National Mission for Enhanced Energy Efficiency
National Mission on Sustainable Habitat
National Water Mission
National Mission for Sustaining the Himalayan Ecosystem
National Mission for a Green India
National Mission for Sustainable Agriculture
National Mission on Strategic Knowledge for Climate
COMPARITIVE STUDY OF SOLAR POLICIES
7. JAWAHARLAL NEHRU NATIONAL SOLAR MISSION
Jawaharlal Nehru National Solar Mission is a major initiative of the Government of India
with active participation from States to promote ecologically sustainable growth while
addressing India's energy security challenge.

a. MISSION OBJECTIVE

The objective of the Jawaharlal Nehru National Solar Mission is to establish India as a global
leader in solar energy, by creating the policy conditions for its large scale diffusion across
the country as quickly as possible. The Mission adopted a 3-phase approach, spanning the
period of the 11th Plan and first year of the 12th Plan (up to 2012-13) as Phase 1, the
remaining 4 years of the 12th Plan (2013-17) as Phase 2 and the 13th Plan (2017-22) as
Phase 3.

At the end of each plan, and mid-term during the 12th and 13th Plans, there will be an
evaluation of progress, review of capacity and targets for subsequent phases, based on
emerging cost and technology trends, both domestic and global. The aim would be to
protect Government from subsidy exposure in case expected cost reduction does not
materialize or is more rapid than expected.

b. JNNSM CAPACITY ADDITION TARGET

SNO. SEGMENT TARGET FOR CUMULATIVE CUMULATIVE


PHASE I TARGET FOR TARGET FOR
(2010-2013) PHASE II PHASE III
(2013-2017) (2017-2022)
1 Utility Grid Power including 1100MW 10000MW 20000MW
rooftop
2 Off grid solar application 200MW 1000MW 2000MW
3 Solar collectors 7 million sqmt 15 million sqmt 20 million sqmt

c. PHASE I OF JNNSM

Phase I of National Solar Mission was divided into two Batches i.e. batch I & II. In Batch I,
capacity addition of 150 MW of grid connected solar PV plants and 500 MW of grid
connected solar thermal plants was envisaged. Whereas in Batch II, the remaining targeted
capacity for Solar PV i.e. 350 MW was awarded.

Apart from these grid connected large scale plants, small rooftop plants of capacity less than
2MW each were also allotted under GBI scheme in Rooftop PV and small Solar Power
Generation Programme (RPSSGP).
COMPARITIVE STUDY OF SOLAR POLICIES
BUNDLING OF SOLAR POWER

In order to facilitate grid connected solar power generation under the first phase, without
any direct funding by the Government, Government approved NTPC VidyutVyapar Nigam
(NVVN) as the nodal agency to purchase 1000 MW of solar power from the project
developers, bundle it with the unallocated power available from the NTPC coal-based
stations and sell this bundled power to the Distribution Utilities. Bundling concept was
introduced to keep the cost of bundled power approximately Rs 5/kWh. It was decided to
select projects of 500 MW capacity each based on solar thermal and solar photovoltaic (PV)
technologies.

JNNSM Batch I BIDDING RESULT SUMMARY

SOLAR PV SOLAR THERMAL


CERC Approved tariff for Solar PV (Normal CERC Approved tariff for Solar Thermal
Depreciation) (Normal Depreciation)
1791 Paise/kWh 1531 Paise/kWh
Maximum discount Minimum discount Maximum discount Minimum discount
offered(paise) offered(paise) offered(paise) offered(paise)
696 595 482 307

Total 30 SPV projects were selected after bidding process and subsequently 28 project
developers signed PPAs for 140 MW capacity with NVVN. Similarly seven solar thermal
projects were selected after bidding process and signed PPA with NVVN. Average tariff for
selected SPV projects was 1216 Paise/kWh which was 32% lower than the CERC approved
benchmark tariff of 1791 Paise/kWh. For solar thermal projects, average tariff for selected
projects was 1141 Paise/kWh which was 25% lower than the CERC approved benchmark
tariff of 1531 Paise/kWh for solar thermal plants.

In batch-I, a total of 704 MW capacity grid connected solar power projects have been
selected, which comprise of 500 MW capacity of solar thermal power projects and 204
MW of PV power projects.

JNNSM Batch II BIDDING RESULT SUMMARY

BATCH II SOLAR PV
CERC APPROVED TARIFF FOR SOLAR PV (NORMAL DEPRICIATION)
1539 Paise/kWh
Maximum discount offered(Paise/kWh) Minimum discount offered(Paise/kWh)
790 595
FINAL TARIFF AFTER DISCOUNT FOR SOLAR PV
749 944
COMPARITIVE STUDY OF SOLAR POLICIES
Under Batch II of Phase I, the total aggregate capacity of grid connected Solar Projects was
350 MW for the deployment of Solar PV Power Projects.SPV projects worth 350 MW were
awarded with an average tariff of 877 paise/kWh which was 43% lower than the benchmark
tariff approved by CERC.

d. STATE WISE COMMISIONING STATUS OF PROJECTS UNDER


JNNSM

(i) BATCH-1, PHASE-1

SOLAR PV

S. STATE SolarPV capacityto SolarPV Balance


NO be commissioned capacity capacityto be
as per PPA (MW) actually commissioned
commissioned (MW)
(MW)
1 Andhra Pradesh 10.5 9.75 0.75
2 Chhattisgarh 4 4 0
3 Haryana 8.8 7.8 1
4 Maharashtra 5 5 0
5 Odisha 8 7 1
6 Punjab 8.5 6 1.5
7 Rajasthan 12 11 1
8 Tamil Nadu 7 5 2
9 Uttarakhand 5 5 0
10 Uttar Pradesh 8 7 1
11 Jharkhand 16 16 0
12 Madhya Pradesh 5.25 5.25 0
TOTAL 98.05 88.80 9.25

GRID SOLAR PV UNDER MIGRATION SCHEME

S NO STATE SolarPV capacity Solar PV Balance capacity


allocated as per capacity actually to be
PPA (MW) commissioned commissioned
(MW) (MW)
1 MAHARASHTRA 11 11 0
2 PUNJAB 2 2 0
3 RAJASTHAN 41 35 6
TOTAL 54 48 6
COMPARITIVE STUDY OF SOLAR POLICIES
GRID SOLAR THERMAL PROJECTS UNDER MIGRATION SCHEME

S NO STATE Solar PV Solar PV Balance capacity


capacity capacity actually to be
allocated as per commissioned commissioned
PPA (MW) (MW) (MW)
1 RAJASTHAN 30 2.5 27.5

(ii)BATCH-1, PHASE-2

S. NO STATE Solar PV Solar PV Balance


capacity to be capacity capacity to be
commissioned actually commissioned
as per PPA commissioned (MW)
(MW) (MW)
1 Rajasthan 295 285 10
2 Maharashtra 25 5 20
3 Andhra Pradesh 20 0 20
TOTAL 340 290 50

e. OFF GRID TARGETS

The mission targets 200 MW of off-grid solar PV installed capacity by 2013 and 2,000 MW by
2022. Given the lack of electrification and access to clean energy sources in Indian villages
coupled with T&D losses, decentralised distributed systems make very good sense.
Therefore, the targets set for off-grid capacity could be bolder. A capital subsidy of `150 per
Wp is available for rural microgrids as against `90 per Wp for other applications.

Even if all the 200 MW was allocated to rural microgrids, the total subsidy would amount to
only `30 billion (this outlay is expected from tax revenues). Even if the capacity is increased
substantially (set aside for utility-scale PV), the total subsidy would work out to be still
considerably less than the incentive offered for the utility scale.

MICRO GRID BASED ON SOLAR POWER


Number of villages 14290
Load per village with 150 households (kW) 35
(minimum load to supply lifeline support)
Total capacity solar based micro grids(MW) 500
Current policy of Capital Subsidy(Rs/Wp) 150
If in addition a generation-based tariff offered(Rs/kWh) 4.25
Annual outlay for GBI(Rs billion) 3.54
NPV of GBI over twenty-five years(Rs billion) 32.1
TOTAL OUTLAY OF CAPEX+GBI(Rs billion) 107
COMPARITIVE STUDY OF SOLAR POLICIES
8. REC MECHANISM OVERVIEW:
According to EA, it is the mandate of SERCs to ensure that the electricity mix in their
respective states has a fixed percentage of renewable energy. This mechanism is known as
the Renewable Purchase Obligation or the RPO. But there is an inherent flaw in this
mechanism. As each state has its own potential, different states have different RE potentials
and thus supply mixes. Also as the RPO mechanism concentrates mainly on the intra-state
use, a state devoid of any potential didnt have either incentive for using renewable energy
nor was there any mechanism for inter-state sale of RE. Without such a mechanism, the
entire effort can turn into a sham as RE would still be generated and used in isolated
pockets only. Also, as RE is a costlier form of power, states would not want to generate any
more than their respective RPOs and those states with a meagre RE potential also do not
use any RE in absence of any mechanism promoting its inter-state purchase.

To address all these challenges and to turn the environmental salubrity of renewable energy
into a marketable entity, the concept of Renewable Energy Certificates was developed.
Apart from facilitating inter-state RE transactions, RECs also have some other objectives as
well, which can be identified as:

a. Effective implementation of RPO obligations across all states

b. Creating competition among competing RE technologies

c. Protecting the local distribution licensee selling RE

d. Overcoming geographical impediments to use RE

e. Reduce the costs for RE transactions

In the Indian context, generation of 1 MW of RE allocates a REC to the generator, which can
be sold in an energy exchange to an obligated entity which cannot find a RE generator to
fulfil its RPO obligations, thereby overcoming the geographical constraints the transaction of
RE poses.

There are some important points of note here. REC mechanism is not an incentive scheme.
It is simply a market mechanism to enable various obligated entities to meet their RPO
norms as set by their respective SERCs. The mechanism co-exists with all the current
incentive schemes as, these schemes offer incentives for generation only. Also it is not
related to carbon credits. The two mechanisms operate parallel to each other for the
benefit of RE generators.
COMPARITIVE STUDY OF SOLAR POLICIES
9. OPERATIONAL FRAMEWORK OF REC MECHANISM

As can be seen from the figure above, the easiest route of selling RE to the obligated entities
is through the grid, as established by the connection (1).The accounting of the RE produced
by the generators is carried out by the SLDCs (1) the information of which is forwarded to
the national registry (3). If the generator chooses to sell their RE electricity through the REC
route, he makes an application to the national registry (2), after which a RECs is issued to
the generators (4) as per the amount of power generated, which they can trade in the
power exchanges. If these obligated entities cannot achieve their RPOs, they buy RECs in the
exchange to make up for whatever is the deficit in their supply mix (5), which are
redeemable at the national registry itself (6). The compliance reporting is done to the
monitoring committee of each state (7), which submits a quarterly report to each states
SERC.
COMPARITIVE STUDY OF SOLAR POLICIES
10. STATE WISE RPO (SOLAR & NON SOLAR)
In order to give thrust for solar development, states also come up with Solar Policy to
attract the investor in this sector.

S. STATE ORDER TYPE 2010- 2011- 2012- 2013- 2014-


NO DATE 2011 2012 2013 2014 2015
1 ANDHRA 06 JULY NON 4.75% 4.75% 4.75% 4.75% 4.75%
PRADESH 2010 SOLAR
SOLAR 0.25% 0.25% 0.25% 0.25% 0.25%
2 ASSAM 21 JUNE NON 1.35% 2.70% 4.05% 5.40% 6.75%
2010 SOLAR
SOLAR 0.05% 0.10% 0.15% 0.20% 0.25%
3 BIHAR 16 NOV NON 1.25% 2.0% 3.25% 3.50% 3.75%
2010 SOLAR
SOLAR 0.25% 0.50% 0.75% 1.0% 1.25%
4 CHATTISGARH 9 NOV NON 4.75% 5% 5.25% 5.50% 5.75%
2010 SOLAR
SOLAR 0.25% 0.25% 0.25% 0.25% 0.25%
5 GUJARAT 17APRIL NON 4.75% 5.50% 6% 6.5% 7%
2010 SOLAR
SOLAR 0.25% 0.5% 1% 1% 1%
6 HARYANA NOV NON 1.25% 1.25% 1.25% 1.50% 1.50%
2010 SOLAR
SOLAR 0.25% 0.50% 0.75% 1.0% 1.25%
7 HIMACHAL 12 NON 10% 11% 12% 13% 14%
PRADESH MARCH SOLAR
2010
SOLAR 0.10% 0.10% 0.10% 0.10% 0.10%
8 JHARKHAND 31 NON 1.75% 2.0% 3.0% 4.0% 5.0%
MARCH SOLAR
2010
SOLAR 0.25% 0.50% 1.0% 1.0% 1.0%
9 KARNATAKA 16 NON 7% 7% 7% 7% 7%
MARCH SOLAR
2011
SOLAR 0.25% 0.25% 0.25% 0.25% 0.25%
10 KERELA 23 NOV NON 3.0% 3.30% 3.63% 3.99% 4.29%
2010 SOLAR
SOLAR 0.25% 0.25% 0.25% 0.25% 0.25%
11 MADHYA 19 NOV NON 0.80% 2.10% 3.40% 4.70% 6.0%
PRADESH 2010 SOLAR
SOLAR 0.40% 0.60% 0.80% 1.05 1.20%
12 MAHARASHTRA 7 JUNE NON 5.75% 6.75% 7.75% 8.5% 8.5%
2010 SOLAR
SOLAR 0.25% 0.25% 0.25% 0.5% 0.5%
13 MEGHALAYA 21 DEC NON 0.60% 0.80% 1.20% 1.40% 1.60%
2010 SOLAR
SOLAR 0.20% 0.30% 0.40% 0.40% 0.40%
COMPARITIVE STUDY OF SOLAR POLICIES
14 NAGALAND 20 OCT NON 14.75% 15.75% 16.75% 16.75% 16.75%
2010 SOLAR
SOLAR 0.25% 0.25% 0.25% 0.25% 0.25%
15 ORRISA 16 MAR NON 4.50% 4.75% 5.0% 5.25% 5.50%
2010 SOLAR
SOLAR 0.50% 0.75% 1.0% 1.25% 1.50%
16 RAJASTHAN 23 DEC NON 7.75% 8.5% 6.35% 7.20% 8.5%
2010 SOLAR
SOLAR 0.50% 0.75% 1.0% 1.25% 1.50%
17 TAMIL NADU 19 MAY NON 10% 10% 10% 10% 10%
2011 SOLAR
SOLAR 0.15% 0.25% 0.25% 0.50% 0.50%
18 TRIPURA 9 NOV NON 0.90% 0.90% 1.90% 1.90% 1.90%
2009 SOLAR
SOLAR 0.10% 0.10% 0.10% 0.10% 0.10%
19 UTTARAKHAND 6 JULY NON 4.0% 4.50 5.0% 5.5% 6.0%
2010 SOLAR
SOLAR 0.0% 0.03% 0.05% 0.07% 0.09%
20 UTTAR PRADESH 17 AUG NON 3.75% 4.50% 5.00% 5.25% 5.50%
2010 SOLAR
SOLAR 0.25% 0.50% 1.0% 1.5% 1.5%
21 WEST BENGAL 10 AUG NON 2.0% 3.0% 4.0% 5.0% 6.0%
2010 SOLAR
22 JERC FOR GOA 5 MAY NON 0.75% 1.70% 2.60% 2.60% 2.60%
2010 SOLAR
SOLAR 0.25% 0.30% 0.40% 0.45% 0.50%
24 JERC FOR 5 MAY NON 1.7% 2.75% 4.75% 4.75% 4.75%
MANIPUR 2010 SOLAR
SOLAR 0.25% 0.25% 0.25% 0.25% 0.25%
25 JERC FOR 5 MAY NON 4.75% 5.75% 6.75% 6.75% 6.75%
MIZORAM 2010 SOLAR
SOLAR 0.25% 0.25% 0.25% 0.25% 0.25%
COMPARITIVE STUDY OF SOLAR POLICIES
11. STATEs SOLAR POLICIES

11.1 GUJARAT SOLAR POLICY 2009


A state specific policy dedicated to solar was first envisioned by Gujarat in 2009. The
outlines were given under the policy titled Solar Power Policy -2009. The policy was the
first solar specific policy introduced in the country predating the National Solar Mission.

The Gujarat Solar Policy is operative till 31st March 2014.Any Solar Power Generator (SPG)
commissioned during the operative period shall become eligible for incentives declared
under this policy for a period of 25 years.

SALIENT FEATURES

CAPACITY
Only new plants and machinery will be eligible under this Policy. No fossil fuel
shall be allowed for Solar Thermal Project.
The minimum capacity of for Solar PV and Solar Thermal projects will be 5
MW each. A total of 500MW SPG shall be allowed for installation during the
operative period of this policy.

CROSS-SUBSIDY CHARGE
Cross subsidy surcharges shall not be applicable for Open Access obtained for
third party sale within the state.

WHEELING CHARGES
As per determined by GERC.

ELECTRICTY DUTY
Exempted from payment of electricity duty for sale through all modes(self-
consumption/sale to third party/sale to licensee)
Exemption from demand cut to the extent of 50% of installed capacity

PPA
PPA duration will be 25 years

BANK GUARANTEE
Developer to furnish a BG @Rs 50Lakhs/MW at the time of PPA signing with
Distribution Licensee.BG to be refunded if the developer commissions the
project in time as per PPA.

METERING OF ELECTRICITY
COMPARITIVE STUDY OF SOLAR POLICIES
Electricity generated would be metered jointly on a monthly basis by
GEDA/GETCO. Metering to done at sending sub-station of 66 kV or above,
located at the site.

REACTIVE POWER CHARGES


As per GERC order.

TRANSMISSION INFRASTRUCTURE
Transmission line from SPG switch yard to GETCO sub-station shall be laid by
GETCO.SPG to inject power at 66kV.

SHARING OF CDM BENEFIT


SPG will pass 50% of CDM benefit to DISCOM with whom PPA is signed.

FORECASTING & SCHEDULING


SPG based generation shall not be covered under scheduling procedure for
Intra-state ABT.

NODAL AGENCIES FOR FACILITATION AND IMPLEMENTATION OF SOLAR POLICY-2009


Gujarat Energy Development Agency (GEDA)
Gujarat Power Corporation Limited (GPCL)

PROs CONs

The policy is very detailed and There is capacity cap of minimum 5


comprehensive and even describes MW for SPG.
the financial and technical Bank guarantee of 50 Lakhs/MW is
requirements of SPG. on the higher side.
The tariff allotted is very lucrative. The policy limits no. of players by
Long Incentive period of 25 years providing stringent qualifying criteria.
attract investors. The policy doesnt talk about land
Wheeling charges of 2% are allotment which is a major
comparatively lower than other requirement for solar projects.
states. Banking of power is not allowed.
The incentive programme is very The policy is not supportive to
good and a large no. of benefits are
budding entrepreneurs.
provided
COMPARITIVE STUDY OF SOLAR POLICIES
11.2 RAJASTHAN SOLAR POLICY 2011
The policy aims at developing Rajasthan as a global hub of solar power of 10,000-12,000
MW capacity in next 10-12 years to meet energy requirements of Rajasthan and India. To
achieve grid parity in next 7-8 years, the State will encourage the Solar Power Developers to
establish manufacturing plant of their technology in Rajasthan.

SALIENT FEATURES

The Policy will come into operation with effect from 19.4.2011 and will remain in force until
superseded or modified by another Policy.

To achieve the objectives of this Policy, the targets under the policy are mentioned below:

1. The State Government has sanctioned two Solar Power Projects of 5 MW capacity under
the GOI guidelines for Generation Based Incentive scheme for Grid Interactive Solar Power
Generation Projects issued by MNRE. The power evacuation transmission line from
generating plant sub-station to the receiving RVPN/Discoms of Rajasthan sub-station will be
laid by STU/Home Discom as per the prevailing orders of RERC.

2. The Rajasthan State has sanctioned 66 MW solar power projects in compliance of the
RERCs orders. These sanctioned projects were migrated to National Solar Mission by the
State Government. The power produced from these solar power plants shall be procured by
NVVN as per mechanism provided under National Solar Mission Phase-1. The Discoms of
Rajasthan shall purchase this solar power from NVVN along with the equivalent amount of
MW capacity from the unallocated quota of NTPC stations allotted to NVVN by Ministry of
Power, GoI. The power evacuation transmission line from generating plant sub-station to
the receiving RVPN/Discoms of Rajasthan sub-station will be laid by STU/Home Discom as
per the prevailing orders of RERC.

3. The Rajasthan State will develop 50 MW SPV and 50 MW Solar Thermal Power Plants
through selection of developer(s) by the tariff based competitive bidding process on
concept of bundling of Solar Power with equivalent amount of MW capacity of conventional
power. The successful bidder will set up Solar Power Plant in Rajasthan and supply
equivalent amount of MW capacity of conventional power from Conventional Power Plants
located anywhere in India. The power evacuation transmission line from generating plant
sub-station to the receiving RVPN/Discoms of Rajasthan sub-station will be laid by
STU/Home Discom as per the prevailing orders of RERC.

4. The Rajasthan State will promote setting up of Solar Power Plants connected at 33 kV &
above level under the guidelines of National Solar Mission (NSM). The minimum/maximum
capacity allocation to each Solar Power Producer will be as per MNRE guidelines. The power
evacuation transmission line from the Generating plant sub-station to the RVPN/Discom
receiving Sub-station will be laid as per provisions of the orders of appropriate Commission.
COMPARITIVE STUDY OF SOLAR POLICIES
5. The state government will support setting up of 100 MW solar photovoltaic power plants
and 100 MW solar thermal power plants under phase I of the Rajasthan Solar Energy Policy
2011 for direct sale of power to discoms in the state. Under phase II (2012-2017), the state
governmentplans to add another 400MW of solar power through tariff based competitive
bidding process. The power evacuation transmission line from generating plant sub-station
to the receiving RVPN/Discoms of Rajasthan sub-station will be laid by STU/Home Discom as
per the prevailing orders of RERC.

The Rajasthan State will promote Solar Power Producers to set up Solar Power Plants of
unlimited capacity for captive use or sale of power to 3rd party/States other than Rajasthan.
There will be no upper ceiling for power projects. The power evacuation transmission line
from the Generating plant sub-station to the RVPN/Discom receiving Sub-station will be laid
as per provisions of the orders of appropriate Commission.

7. The Rajasthan State will promote deployment of Roof-top and Other Small Solar Power
Plants connected to LT/11kV Grid as per guidelines of MNRE under Rooftop PV & Small Solar
Generation Programme (RPSSGP) of NSM. The minimum/maximum capacity for power
project sanctioned under this category will be as per the guidelines issued by MNRE. The
power evacuation transmission line from generating plant sub-station to the receiving
RVPN/Discoms of Rajasthan sub-station will be laid by STU/Home Discom as per the
prevailing orders of RERC.

8. The State will promote setting up of small solar power plants connected at 11 kV grid of 1
MW capacity each for direct sale to State Discoms of Rajasthan. The total capacity under
this category will be 50 MW. The selection of the projects will be through tariff based
competitive bidding process. There will be no upper ceiling for power projects.

9. The Rajasthan State will promote Solar Power Producers to set up Solar Power Plants of
unlimited capacity for sale through RE (Solar) Certificate mechanism. The power evacuation
transmission line from the Generating plant sub-station to the RVPN/Discom receiving Sub-
station will be laid as per provisions of the orders of appropriate Commission

10. The Rajasthan State will promote Solar Power Producers to set up Solar Power Plants
along with Solar PV manufacturing plants in Rajasthan. The target under this category will
be 200 MW up to 2013.

11. The Rajasthan State will also promote decentralized and off-grid solar applications,
including hybrid system such as solar water heaters, solar cooling systems, air drying, steam
cooking, power generation, sterling engine. The off-grid solar applications shall be promoted
for replacement of diesel based generators sets. The Rajasthan State will also consider
incentives for promotion of decentralized and off grid solar applications.

12. Rajasthan also intends to set up Pilot Demonstration Projects under National Solar
Missions R&D initiatives in Phase 1 of Solar Mission. This will include:
COMPARITIVE STUDY OF SOLAR POLICIES
a. 50-100 MW Solar thermal plant with 4-6 hours storage (which can meet both
morning and evening peak load and increased plant load factor up to 40%)

b. A 100 MW Parabolic trough technologies based solar thermal plant

c. A 100-150 MW Solar hybrid plant with coal, gas or bio-mass to address variability and
space-constraints.

d. 20-50 MW Solar plant with or without storage, based on central receiver technology
with molten salt/steam as working fluid and other emerging technologies.

e. Grid connected rooftops PV systems on selected Government buildings and


installations, with net metering

f. Solar based space cooling and refrigeration systems

The capacity allocation for pilot demonstration project will be finalized in consultation with
MNRE.

The maximum capacity to be commissioned under this Clause will be decided by the
Rajasthan Government after studying the subsidy pattern for these demonstration projects
under NSM

13. The Rajasthan State will develop Solar Parks (with RREC as nodal Agency) of more than
1000 MW capacity in identified areas of Jodhpur, Jaisalmer, Bikaner and Barmer districts in
various stages. RREC will allocate budget for development of infrastructure in Solar Parks to
SPV.The SPV will develop the initial infrastructure from the funds allocated by RREC, which
will be subsequently recouped from the Solar Power Producers whose project are located in
Solar Parks by levying development charges.

14. The Rajasthan State will promote Solar Water heating system by adopting the key
strategy of making necessary policy changes for mandatory use of solar water heating
system (SWHS) on Industrial, commercial, residential and other establishments.

DEVELOPMENTAL CHARGES
For Solar power projects established for sale of solar power to parties other
than Discoms of Rajasthan, the Solar Power Producer shall deposit non-
refundable development charge of Rs. 10 Lacs per MW to Rajasthan
Renewable Energy Corporation Ltd. within one month from the date of issue
of in-principle clearance for availing benefits, facilities and concessions under
the provisions of this policy. For solar power projects established for sale of
solar power to Discoms of Rajasthan State, no development charges will be
leviable from the Solar Power Producers.
COMPARITIVE STUDY OF SOLAR POLICIES
CREATION OF RAJASTHAN RENEWABLE ENERGY INFRASTRUCTURE DEVELOPMENT
FUND
The resources mobilized by collection of development charges will be
credited to Rajasthan Renewable Energy Infrastructure Development Fund.
This fund will be utilized for creation of infrastructure such as transmission
network, roads etc. for accelerated development of renewable energy.

GRID CONNECTIVITY
For creation of proper facility for receiving power, the Solar Power Producer
shall pay Grid Connectivity charges as finalized by RERC from time to time to
Discoms of Rajasthan/RVPN as applicable.
The power evacuation transmission line from generating plant sub-station to
the receiving RVPN/Discoms of Rajasthan sub-station will be laid by
STU/Home Discom or as per the prevailing orders of RERC.
For grid connectivity/construction of line to be arranged by RVPN/ Discoms of
Rajasthan, the Solar Power Producer shall submit time-frame for construction
of their plant along with Bank Guarantee equivalent to the cost of bay and
transmission/ distribution line with an undertaking to use the system within
prescribed period. In case there is any delay in utilization of system, a penalty
@ 12% per annum for the period of delay on the amount of Bank Guarantee
will be levied by RVPN/ Discoms of Rajasthan. The Bank Guarantee shall be
returned to the Solar Power Producer after commissioning of the project on
depositing amount of penalty, if any on account of delay in the utilization of
the system.

ELECTRICITY DUTY
The energy consumed by the Power producers for own use will be exempted
from payment of the electricity duty.

METERING OF ELECTRICITY
Metering arrangement shall be made as per Central Electricity Authority
(Installation & Operation of Meters) Regulations, 2006, the grid code, the
metering code and other relevant regulations issued by RERC/CERC in this
regard.

REACTIVE POWER CHARGES


As per CERC order.

SHARING OF CDM BENEFIT


Solar Power Producer will pass CDM benefit to DISCOM with whom PPA is
signed as per appropriate commissions order.
COMPARITIVE STUDY OF SOLAR POLICIES
FORECASTING AND SCHEDULING
The Solar energy generated for sale will not be covered under scheduling
procedure for Intra-State ABT.

PROs CONs

Government to provide land at The policy has been amended many


concessional rates. times in short period which provides a
Bank Guarantee deposit is sense of instability to the investor.
comparatively low at Rs. 5 lakhs per The policy doesnt provide guidelines
MW. for eligible producer.
Surplus energy can be sold outside A penalty of Rs. 5 lakhs per MW, if
state. producer commences work on
Banking is allowed. allotted land without project approval.
The operative period is not given in
the policy, hence new policy can be
anticipated anytime soon which adds
to uncertainty.
Wheeling charges are high.
COMPARITIVE STUDY OF SOLAR POLICIES
11.3 KARNATAKA SOLAR POLICY
Under the Karnataka Renewable Energy Policy, it is envisaged that the State will have a
target for achieving 126 MW of solar power up to 2013-14. The Govt. of Karnataka had
released the Solar Policy for FY11-FY16 on 1st July 2011 envisaging to set up a capacity of
200 MW of solar power in the state for the RPO fulfilment of the ESCOMs. The policy came
into force from 1st July 2011 and shall remain in force up to 31st March 2016.

SALIENT FEATURES

PROPOSED CAPACITY
It is proposed to install 200 MW up to 2015-16, for the purpose of
procurement by the ESCOMS. This will be in addition to the allotment
received under JNNSM.
The minimum capacity shall be 3 MW and max. capacity will be 10 MW for
Solar PV projects and min. capacity shall be 5 MW for Solar Thermal projects
Power evacuation shall be through 11 KV and above voltage will only be
permissible.

WHEELING & OA CHARGES


In addition to envisaged 200MW capacity, captive power plants and plants
for sale to third party will also be set up. In case of captive power plants and
projects for sale of power to third party other than ESCOMs, wheeling and
open access charges have to be paid as determined by KERC/CERC.

REC SCHEME
Under the REC mechanism the project developers can sell their power at the
pooled cost of power purchase only to the ESCOMS. A capacity of 100 MW
can be installed under this scheme.

CDM PROCEEDS
Sharing of CDM proceeds will be as per bidding documents.

METERING
Metering arrangement shall be made as per Central Electricity Authority
(Installation & Operation of Meters) Regulations, 2006, the grid code, the
metering code and other relevant regulations issued by KERC/CERC in this
regard
The state will continue to implement JNNSM and all other schemes of the
MNRE.
COMPARITIVE STUDY OF SOLAR POLICIES
PROs CONs
State government provides land if Land Owners to be equity partners of gross
available. energy generated.
Banking of power is allowed. Wheeling charges on the higher side.
Solar grid connected projects above 1 MW For projects not under JNNSM the project
are given additional incentives up-to Rs capacity shall be 3 MW to 10 MW for PV
12/kWh for solar PV &Rs. 10/kWh for solar and minimum for solar thermal be 5 MW.
thermal in addition to tariff by KERC.
KREDL assists in availing CDM benefits.
Karnataka govt. to reserve 50 MW capacity
for solar plants to bundle it with thermal
projects outside state.
COMPARITIVE STUDY OF SOLAR POLICIES
11.4 MADHYA PRADESH SOLAR POLICY 2012
All Solar energy based power project Developers (Solar PV/Solar thermal) and
manufacturing units of equipments, ancillaries related to Solar Power projects shall be
eligible for benefits under the Policy. Only new plant and machinery shall be eligible for
installation under the Policy.

SALIENT FEATURES

There will be four categories of solar projects under the policy.


Category I:
Projects selected as per the competitive bidding process for selling power to MP
Discoms / MP Power Management Company. Maximum/minimum capacity will be
as per RfS document issued by GoMP from time to time. Only project capacities to
be installed in the state of Madhya Pradesh shall be eligible for incentives under this
Policy. The total capacity under this category will be as per the Renewable Purchase
Obligation (RPO) targets specified by M.P. Electricity Regulatory Commission
(MPERC) from time to time or as decided by the GoMP.

Category II:
Projects, of unlimited capacity (subject to single project capacity limitation described
below), to be set up for captive use or sale of power to 3rd party within or outside
the state or for sale of power to other states through open access . Only project
capacities to be installed in the state of Madhya Pradesh shall be eligible for
incentives under this Policy.

Projects on Private Land: There is no maximum capacity cap on single project


installed on private land. For projects proposed to be set up on private land, any
developer willing to establish solar power project shall be eligible for incentive
subject to registration with the GoMP. Performance Guarantee to be provided will
be as per the guidelines specified in the qualification/selection document issued by
GoMP.

Category III:
Projects, of unlimited capacity, to be set up under Renewable Energy Certificate
(REC) mode. The minimum and maximum single project capacity for accreditation
under REC mechanism will be as per the Guidelines/Orders/Regulations issued by
CERC/MPERC from time to time.

Projects on government Land: For projects proposed to be set up on government


land, in addition to CERC REC mechanism criteria, there shall be a set of qualification
criteria
fixed by the GoMP. Every such applicant shall be evaluated against each of the
qualification criteria as specified in the invitation document. Upon eligibility, the
COMPARITIVE STUDY OF SOLAR POLICIES
available land shall be offered on the basis of maximum free energy per Mega Watt
offered by the qualified bidders. Only such selected projects shall be eligible for
incentives under this Policy. The Developer shall submit Performance Bank
Guarantee at the rate of Rs. 5.0 Lac/MW or part thereof to New & Renewable Energy
Department (GoMP). Guarantee shall be valid for a period of twenty four (24)
months for Solar PV projects and for a period of forty (40) months for Solar thermal
projects respectively

Projects on Private Land: For projects proposed to be set up on private land, any
enterprise fulfilling the requirements/criterion as specified under CERC REC
mechanism may apply to the State Nodal Agency as per the procedures laid down by
CERC and/or MPERC. Such developers can apply for registration any time. In case the
project is set up on private land then developer is exempted from submitting any
performance guarantee

Category IV:
Projects under Jawaharlal Nehru National Solar Mission. The minimum and
maximum project capacity will be as per JNNSM guidelines.

PERFORMANCE GUARANTEE
Category I project: It will be as per the guidelines specified in the
qualification/selection document issued by GoMP.
Category II Projects and Category III: The Developer shall submit Performance
Bank Guarantee (for projects being setup on government land at the rate of
Rs. 5.0 Lac/MW or part thereof to New & Renewable Energy Department
(GoMP). The Bank Guarantee shall be valid for a period of twenty four (24)
months for Solar PV projects and for a period of forty (40) months for Solar
thermal projects respectively.

CONTRACT DEMAND REDUCTION


The Industrial Consumers opting to buy power from Solar Power Project
under category II and III shall be allowed corresponding pro-rata reduction in
Contract Demand on a permanent basis but subject to the decision of MPERC
in this regards.

METERING
Metering equipment, as may be stipulated by MPPTCL or by respective MP
Discom, shall be installed at the interconnection point which shall be line
isolator of outgoing feeder on HV side of the pooling substation. Developers
will install metering equipments at their own cost.
COMPARITIVE STUDY OF SOLAR POLICIES
GRID EVACUATION & EVACUATION FACILITY
The developer shall be responsible for laying of power evacuation line from
generating station to the nearest substation or interconnection point. He
shall also be responsible for interconnection arrangement which includes
transformer panel, protections, metering etc., at the substation or
interconnection point.

WHEELING AND TRANSMISSION CHARGES


The Developer shall be responsible for payment of all wheeling and
transmission charges to the MPPTCL/respective Distribution Company in case
of sale of power to Third Party Consumers/ Distribution Licensee/ Power
Management Co. Ltd utilizing their network the payment shall be subject to
the regulations of MPERC.

ELECTRICITY DUTY
Policy provides 10-year (from COD) exemption in electricity duty (including
captive units).

BANKING
Banking (2% banking charges) of 100% of energy in every financial year shall
be permitted. The balance energy, if any, at the end of a Financial Year after
return of banked energy shall be purchased by the concerned State
Distribution Company/ State Power Trading Company in accordance with the
rules/ directions of MPERC.
VAT
Equipments purchased for installation of Solar power plants will be exempted
as per VAT rules and entry tax.

CDM BENEFITS
CDM benefits to the solar power project Developers/Investors shall be as per
the provisions specified by MPERC.
COMPARITIVE STUDY OF SOLAR POLICIES
PROs CONs
The state government provides land if Developer to commission project in 15
available, and if not, provides half months.
exemption from stamp duty. A huge amount of registration fee is to
Subsidy on wheeling. be paid. (Rs. 50000 per MW max Rs.
Banking allowed with 2% as banking 500000)
charge.
Carbon credit benefits to investor.
No open-access charges.
Reduction in contracted demand upto
50% installed capacity is allowed if any
consumer of MPSEB sets up captive plant
or purchases solar power.
Solar technology parks shall be
established.
Training programmes offered.
COMPARITIVE STUDY OF SOLAR POLICIES
11.5 ANDHRA PRADESH SOLAR POLICY 2012 & FIRST AMENDMENT
The policy shall come into operation with effect from the date of issuance (26/9/2012) and
shall remain applicable till 2017.

SALIENT FEATURES

INSTALLED CAPACITY
It intends to promote utility grid power projects for Captive Use/ Direct Sale
to third party/within the state and Utility Grid Power Projects for sale
through RE (Solar) Certificate Mechanism. Also, it intends to promote the Off-
Grid Solar applications to meet the power needs on Stand-alone basis.

WHEELING & TRANSMISSION CHARGES


Producer will bear the wheeling and transmission losses as per actual.

BANKING
Banking of 100% of energy shall be permitted for one year from the date of
banking. The settlement of banked energy will be done on monthly basis.
However, banked units cannot be consumed/redeemed from February to
June and also during TOD hours as amended from time to time. Developer
will be required to pay 2% of the banked energy towards banking charges.

OA CHARGES
Intra-state Open Access clearance for the whole tenure of the project or 25
years whichever is earlier will be granted within 15 working days of
application to both the generator and consumer irrespective of voltage level.

ADDITIONAL INCENTIVES

To promote investments in AP, the following incentives would be applicable


till June 2014. These incentives will be in force for a period of seven years
from the date of implementation.

No wheeling and transmission charges will be applicable for sale of electricity


within the state from the Solar Power Projects, to the desired location/s for
captive use/third party sale through the grid. However, producer has to bear
(As per APERC regulation) the wheeling and transmission losses as per actual
in case of captive/open access sale outside the state.
No Cross Subsidy charges for third party sale within the state and for captive
use.
Exemption from electricity duty for captive consumption and third party sale
within the state.
COMPARITIVE STUDY OF SOLAR POLICIES
Refund of VAT ,paid in AP only, by Commercial Dept for all the good used for
Solar developers
Refund of Stamp duty and registration charges paid for land purchase.

EVACUATION INFRASTRUCTURE
The evacuation line from interconnection point to the grid substation shall be
laid by the APTRANSCO or DISCOM at the cost of the developer.

REACTIVE ENERGY CHARGES


Reactive charges applicable to the project developer as per APERC regulation.
COMPARITIVE STUDY OF SOLAR POLICIES
11.6 TAMIL NADU SOLAR POLICY 2012
Tamil Nadu solar policy aims to achieve 3GW installed capacity by 2015 and thereby achieve
grid parity.

SALIENT FEATURES

RPO MECHANISM
3% solar RPO requirement till December 2013 & 6% solar RPO requirement
from 2014
RPO to be applicable to:
o Special Economic Zones (SEZs)
o Industries guaranteed with 24/7 power supply
o IT Parks, Telecom Towers
o All Colleges & Residential Schools
o Buildings with a built up area of 20,000 sq.m. or more
o This mechanism will require generation of 1000 MW by 2015.

The following categories are exempted from SPO


o Domestic consumers
o Huts
o Cottage & Tiny Industries
o Power looms
o LT Industrial consumers
o Agricultural consumers
The SPO will be administered by TANGEDCO.

PROMOTION OF SOLAR ROOF-TOP SYSTEMS


Domestic rooftop GBI:
All domestic consumers will be encouraged to put up roof-top solar installations. A
generation based incentive (GBI) of Rs 2/unit for first two years, Re 1/ unit for
next two years and Re 0.5/unit for subsequent 2 years will be provided for all
solar or solar-wind hybrid rooftops being installed before 31March,2014. A
capacity addition of 50 MW is targeted under this scheme.
Consumers desirous of availing GBIs shall necessarily install separate meters to
measure rooftop generation.

Promoting rooftops in Government:


COMPARITIVE STUDY OF SOLAR POLICIES
o Existing government buildings will be provided with solar rooftops in
phased manner.
o All new government/local body buildings will necessarily be installed with
solar roof-tops.
o All street lights and water supply installations in local bodies will be
energized through solar power in a phased manner.
Promoting Solar Water Heating:
o Government of Tamil Nadu, through various orders, has made the use of
solar water heating systems mandatory for all new
houses/buildings/marriage halls/hotels/ industries having hot water boiler
(steam boiler) using fossil fuel etc.

DEVELOPMENT OF SOLAR PARKS


Utility scale solar parks may comprise 250 MW in sizes of 1 to 5 MW, 600
MW in sizes of 5 to 10 MW and 650 MW of sizes above 10 MW. Solar Power
projects will be developed through competitive/reverse bidding. Solar Parks
with a capacity of about 50 MW each will be targeted in 24 districts.

COMPETITIVE BIDDING
State will select developers through competitive bidding. Investments
through Joint Ventures by State Public Sector Undertakings will also be
encouraged at competitive tariffs.

GURANTEED SINGLE WINDOW CLEARANCE IN 30 DAYS


Various statutory clearances that are essential for the development and
commissioning of Solar Energy Projects will be handled by TEDA in co-
ordination with the concerned departments/agencies. Guaranteed single
window clearance will be provided through TEDA in 30 days so that the
plants can be commissioned in less than 12 months.

SOLAR MANUFACTURING FACILITIES


The government aims to promote indigenous manufacturing of solar panels
and other related equipment. Land will be identified for development of solar
manufacturing parks.

NET METERING
Net metering will be allowed (at multiple voltage levels) to promote rooftop
penetration.
Net metering facility will be extended to Solar power systems installed in
commercial establishments and individual homes connected to the electrical
grid to feed excess power back to the grid with power credits accruing to
the Photovoltaic energy producer.
COMPARITIVE STUDY OF SOLAR POLICIES

WHEELING AND BANKING CHARGES


The wheeling and banking charges for wheeling of power generated from the
Solar Power Projects, to the desired locations for captive use/third party sale
within the State will be as per the orders of the Tamil Nadu Electricity
Regulatory Commission.

ELECTRICITY TAX
Exemption from electricity tax to the extent of 100% of electricity generated
from solar power used for self-consumption/sale to utility will be allowed for
5 years.
COMPARITIVE STUDY OF SOLAR POLICIES
11.7 CHATTISGARH SOLAR POICY 2012-17
The Govt. of Chhattisgarh has released the solar energy policy on 20th November 2012. This
policy will be operative till 31st March 2017. Solar power plants approved, installed and
commissioned during this period would be eligible for the benefits of this policy.

SALIENT FEATURES

The state govt. aims to achieve a target solar power generation capacity between
500MW to 1,000MW by March 2017. This would be achieved through three routes:
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.
Grid connected solar power projects for sale through Renewable Energy (Solar)
Certificate Mechanism. The power generated from these projects can be purchased
by State DISCOMs at Pooled Cost of Power Purchase as determined by CSERC from
time to time. CSPDCL will take a final decision in this regard considering the supply
and demand position of power in the state.
For sale to DISCOMs to fulfill Renewable Purchase Obligation (RPO).

INCENTIVES UNDER INDUSTRIAL POLICY OF CHATTISGARH


The state has considered non-conventional sources of power generation as a
priority industry under the State Industrial Policy 2009-14 and therefore has
extended all the incentives including interest subsidy, fixed capital
investment subsidy, exemption from electricity and stamp duty,
exemption/concession in land premium, project report subsidy and technical
patent subsidy. The state govt. will extend these facilities till March 2017
even after the end of tenure of the Industrial Policy.

ELECTRICITY DUTY
State government shall exempt all soar power projects from paying Electricity
Duty on auxiliary consumption and captive consumption within the state.
Following incentives will be extended to those solar power developers who
commission their solar plant by March 2017. These incentives will be in force
for a period of 7 years from the date of implementation of the project.

VAT
Exemption of VAT by the Commercial Tax Department for all
equipments/materials required for solar power project.
COMPARITIVE STUDY OF SOLAR POLICIES
OPEN ACESS SURCHARGE
Charges for Open Access and losses shall be applicable as approved by the
CSERC/central regulatory body for third party sale outside the state.
WHEELING AND TRANSMISSION CHARGES
Shall be applicable based on the CSERC regulations.

CROSS SUBSIDY
Cross subsidy surcharge shall not be applicable for Open Access obtained for
the Third Party Sale within the state subject to the industries maintaining
their demand within the contracted range. Further it is also not applicable on
captive users.

BANKING
Energy banking facility allowed at mutually agreed terms and wherever
necessary approval of appropriate electricity regulatory commission shall be
obtained.

GRID CONNECTIVITY
Grid connectivity and evacuation facility shall be provided by the CG Transco
or DISCOM at the cost of project developer. Further, if the developer wishes
to lay the evacuation line by themselves, the same can be done without
paying supervision charges to CGTRANSCO.

PROs CONs
Government of Chhattisgarh fulfils the The policy directives are without
land requirement of project. operative period and hence there is
CSEB carries out the maintenance work uncertainty as new policy can be drafted
of lines and equipment of power anytime.
evacuation system. CSEB purchases power at comparatively
Electrical duty exempted for five and lower rate of Rs. 2.25 per unit.
three Years for plant capacity below 10 Banking of power is not allowed.
MW and 10 MW or above respectively.
There is no restriction on generation
capacity.
COMPARITIVE STUDY OF SOLAR POLICIES
12. CONCLUSION
India has a vast solar potential and almost every region is endowed with more than 320 days
of sunlight in the year. States have come up with renewable energy policies but there is a
need to issue separate solar policy by each state to tap the solar potential with main focus
of bringing solar at par with conventional sources. The existing policies provide many
incentives but there is need to nurture entrepreneurship so that more projects can come
up. The policies should also address the delay in statutory clearances.

VERY GOOD GOOD

1. GUJARAT 2.TAMIL NADU


As per many analysts Gujarat has the best One good initiative taken in this policy is
policy for Solar, the potential is very good extending Net metering solar power
and both tariff and tariff-period are very systems installed in commercial
encouraging. Industrialization is widely establishments and individual homes
supported and large incentives are being connected to the electrical grid. It has also
provided. announced exemption from electricity tax,
tax concessions, exemption from demand
cut to those who produce solar power from
their rooftop
2. KARNATAKA 2.ANDHRA PRADESH
Govt. Provides land and KREDL helps in Andhra Pradesh had removed all wheeling
availing incentives and also the tariff given and transmission charges and allowed
is attractive. The solar potential is also very banking within the time frame of a year
good. (except between February and June or
within a single day).The policy also includes
exemption from Cross Subsidy Surcharges
(CSS) and Electricity Duty, and a refund on
Value Added Taxes (VAT) on all components
of the plant and on stamp duty and
registration charges on the purchase of
land. RECs can be availed under the policy
over and above the other incentives.
3. MADHYA-PRADESH 3. CHATTISGARH
The solar potential is very good. The The main requirement of a solar project is
transportation facilities and connectivity are land, and a lot of barren land is available
very good. The government provides and govt. provides assistance in land
training assistance also. acquisition. Also its Discoms are relatively in
good financial condition but there are
problems of villager agitation and political
interferences. Power Surplus state also.
4. RAJASTHAN
The potential is the best in the country,
large amount of barren land available. The
incentive and tariff given is good.
COMPARITIVE STUDY OF SOLAR POLICIES

13. MAHARASHTRA STATE SOLAR POWER SCENARIO


MERC has set out RPO target of 9% including 0.5% solar RPO by FY 2015-16 to be met by
distribution utilities, captive and open access consumers. Considering the existing and
growth in demand MSEDCL would need to procure more than 540 MW of solar power by
FY2015-16 to meet the RPO.

MERC through its Suo Moto tariff order has notified generic levelised tariff of Rs. 8.98/unit
for projects which have signed the PPA after March 31, 2013 and are commissioned during
FY 2012-13.

MSPGCL is presently executing a 125 MW solar PV facility in Sakri, Dhule. The scope of work
of the project player includes design, engineering, manufacture, supply, erection, testing
and commissioning of 75 MW of Crystalline Solar PV technology and/or 50 MW of Thin film
solar PV technology including 10 years of operation & maintenance of the same on turnkey
basis. The project developer will get 85% of the contract value up to the successful issue of
Final Acceptance Test" certificate and remaining 15% of contract value spread over next 10
years after successful completion of O&M period of the contract (with 2% paid every year).

ADB is considering funding of approximately USD 500 Million towards cost of developing
renewable power projects of MSPGCL over the 12th five year plan along with the
development of associated evacuation and system strengthening infrastructure of MSETCL.
MSPGCL is exploring different public private partnership models for implementing the solar
projects.

For the future solar projects, MSPGCL is evaluating the Performance Linked Revenue Sharing
Model. For all these projects MSPGCL has signed or will sign PPAs with MSEDCL for off-take
of Power at MERC determined tariff. In this model the project developer receives a portion
(50%) of his EPC cost after the work is awarded. The bid parameter could be the share in
revenue that the project developer is asking for. The developer will receive this share of the
revenue from this project over its operating life. This pay-out will be a natural incentive and
penalty mechanism linked to actual generation from the plant. In this model the project
developer will have greater commitment as recovery will happen over the life of the project.
COMPARITIVE STUDY OF SOLAR POLICIES
14. LEGAL EVOLVEMENT TO PROMOTE RENEWABLE ENERGY
INCLUDING SOLAR POWER
MERC notified two Regulations on 7 June, 2010. Based on RE Tariff Regulations, 2010, the
Commission determines RE Tariff for different RE technologies including solar technology, at
the beginning of each financial year.

MERC (Terms and Conditions for determination of RE tariff) Regulations,


2010 (MERC RE Tariff Regulations, 2010) &
MERC (Renewable Purchase Obligation, its Compliance and Implementation
of REC Framework) Regulations, 2010 (MERC RPO REC Regulations, 2010)

Regulation 8.1 of the RE Tariff Regulations specifies as follows:-

8.1 The Commission shall notify the generic preferential tariff on suo-motu basis pursuant
to issuance of revised norms by Central Electricity Regulatory Commission at the beginning
of each year of the Control Period for renewable energy technologies for which norms have
been specified under the Regulations. Provided that for the first year of Control Period, (i.e.
FY 2010-11), the generic tariff on suo-motu basis may be determined within a period not
exceeding three months from the date of notification of these Regulations.

15. MERC INITIATIVE TO DEVELOP RENEWABLE ENERGY

15.1 Renewable Purchase Obligation


Section 86 (1) (e) of the EA 2003 and National Tariff Policy mandates the Regulatory
Commissions to fix RPO levels in the states. In accordance with the Acts and Policies, MERC
has issued Renewable Purchase Obligation, its compliance and REC framework
Implementation Regulations, 2010. The RPO have been made applicable to the following
obligated entities in the states:

Distribution Licensee(s)
Captive User(s) with installed capacity of 1 MW and above
Open Access Consumer(s) with contract demand of 1 MVA and above

In order to promote solar energy in the state, MERC has specified separate RPO for solar
energy. The RPO specified by MERC is as shown below:

YEAR FY 12 FY 13 FY 14 FY 15 FY 16
SOLAR 0.25% 0.25% 0.25% 0.50% 0.50%
MINI HYDRO 0.1% 0.1% 0.1% 0.2% 0.2%
OTHER 5.65% 6.65% 7.65% 8.30% 8.30%
TECHNOLOGY
TOTAL 6% 7% 8% 9% 9%
COMPARITIVE STUDY OF SOLAR POLICIES
YEAR FY 12 FY 13 FY 14 FY 15 FY 16
PROJECT ELECTRICITY 141,382 151,024 161,430 172,681 184,890
DEMAND OF
MAHARASHTRA(DRAFT
18TH EPS ACTUAL AS
PER FY 12)(MUs)

SOLAR RPO 0.25% 0.25% 0.50% 0.50% 0.50%

SOLAR CAPACITY 254 542 580 621


REQUIRED AT 17%
CUF(MW)

15.2 Renewable Tariff


MERC issues tariff every year for different renewable sources in accordance with Section 61
(h) of the EA 2003 and MERC Terms and Conditions for determination of RE Tariff
Regulations, 2010. As per the 2nd year and 3rdyear suo moto generic tariff order of MERC for
the first control period following are the tariff approved for upcoming solar projects in the
state getting commissioning in FY13.

Tariff for projects Tariff if Accelerated Tariff if Accelerated


commissioned Depreciation not Depreciation availed (Rs.
in FY13 availed (Rs. /kWh) /kWh)

PPA signed after 31 March 11.16 9.51


2012
PPA signed on or before 31 15.61 13.10
March
2012
COMPARITIVE STUDY OF SOLAR POLICIES
16. MAHARASHTRA MODEL SOLAR POLICY

a. PREAMBLE
Conventional energy sources like coal, oil, natural gas, etc. are limited in quantity, and if
these continue to be depleted at the present rate, it will exhaust in coming decades.

Solar energy offers a clean, climate friendly, abundant an inexhaustible energy resource to
mankind. Due to Government intervention and development of competitive market
amongst the solar manufacturers, the costs of solar energy have been falling rapidly every
year and are entering new areas of competitiveness. Solar thermal electricity (STE) and solar
photo voltaic electricity (SPV) are becoming competitive against conventional electricity
generation in tropical countries.

Maharashtra has reasonably high solar insolation (4-6 kWh/sq. m) with around 280-300
clear sunny days in a year.

Eastern Maharashtra is considered to be one of the most suitable regions for solar projects.
As on 31.03.2013 Maharashtra has a total installed capacity of 205340.26 MW out of which
50.15 MW is solar installed capacity.

Knowing the importance of promoting solar power, the government of India has launched
Jawaharlal Nehru National Solar Mission (JNNSM) under the National Action Plan for Climate
Change (NAPCC). The goal of the mission is to provide tariff subsidies to increase scale and
drive down costs to grid parity for achieving target of 22,000 mw by 2022 in a phased
manner.

b. TITLE AND ENFORCEMENT


The policy will be known as MAHARASHTRA SOLAR ENERGY POLICY. The government of
Maharashtra will undertake a review of this policy as and when required in view of any
technological breakthrough or any changes taking place in the policy at national level.

c. OBJECTIVES
To generate 1000 mw of solar energy by 2015.
To achieve grid parity by 2015.
To put in place an appropriate investment climate, that could leverage the Clean
Development Mechanism (CDM).
Promotion of R&D and facilitation of technology transfer.
Promotion of local manufacturing facilities.
COMPARITIVE STUDY OF SOLAR POLICIES
d. OPERATIVE PERIOD
Solar power generators (SPGs) installed and commissioned during the operative
period shall become eligible for the incentives declared under this policy, for a
period of twenty five years from date of commissioning or for life span of the SPGs,
whichever is earlier.

e. INSTALLED CAPACITY
A maximum of 1000 MW SPG shall be allowed for installation during operative
period of the policy.

f. CAPACITY CAP
The minimum project capacity of a SPG, in case of Solar Photovoltaic (SPV) and
Solar thermal (ST) shall be 3MW.

g. ELIGIBLE UNIT
Any company or body corporate or association or body of individuals, whether
incorporated or not, or artificial juridical person will be eligible for setting up of
SPGs either for the purpose of captive use and/ or for selling of electricity in
accordance with the Electricity Act-2003, as amended from time to time.

The entity to set up solar power project, either for sale of power and/ or for captive
use of power within the state, shall submit a proposal, with requisite details, as
may be specified to the nodal agency, for qualifying for setting up of the project.

h. DEVELOPMENT OF SOLAR POWER IN MAHARASHTRA

YEAR SPV SOLAR ROOF TOTAL


THERMAL TOP
2010-11 170 25 5 200
2011-12 170 25 5 200
2012-13 170 25 5 200
2013-14 170 25 5 200
2014-15 170 25 5 200
TOTAL 850 125 25 1000
(In MW)
COMPARITIVE STUDY OF SOLAR POLICIES
With an average solar incidence of 4-6 kWh/m2/day, Maharashtra is amongst the
states with high solar insolation in India. Thus Maharashtra will promote setting up
of solar projects to the extent of 1000 MW over a period of 5 years as furnished
above.

i. PLANT AND MACHINERY


Only new plant and machinery shall be eligible for instalment under this policy.

j. METERING OF ELECTRICITY
The electricity generated from SPGs, shall be metered on a monthly basis jointly by
MEDA/MSETCL at a sending substation or located at site. Solar based generation
projects will have to provide ABT compliant meters at the interface points.
Interface metering shall confirm to the CENTRAL ELECTRICITY AUTHORITY
(Installation and Operation of meters) regulations, 2006.

k. GRID CONNECTION AND EVACUATION FACILITY


The evacuation facility from solar substation/switch yard to MSETCL substation
shall be approved by MSETCL after carrying out the system study. The power by
SPG shall be injected at 66 kV.
The transmission line from switch yard to Solar Substation to the MSETCL
substation shall be laid by MSETCL. They should be integrated by installing RTUs by
solar project developer so that penetration can be monitored at the connectivity
substation by SLDC on real time basis.

l. OPEN ACCESS FOR THIRD PARTY SALE


If open access is granted to any developer or beneficiary they shall have to pay the
applicable Open Access charges and losses as approved by MERC from time to
time. However the, Cross Subsidy Surcharge shall not be applicable for Open
Access obtained for third party sale within the state.

m. RENEWABLE PURCHASE OBLIGATION


The quantum of power that can be injected in the grid from all renewable
resources i.e. purchase by distribution licensees plus captive consumers plus third
party sale should meet 9% by 2015-2016.
In which SPGs share 0.50% till 2015 accounting to 580 MW till 2015.
COMPARITIVE STUDY OF SOLAR POLICIES
n. PENALTY FOR NON FULFILLING POWER PURCHASE
OBLIGATION
If the Obligated Entity fails to comply with the RPO target as provided in these
Regulations during any year and fails to purchase the required quantum of RECs,
the State Commission may direct the Obligated Entity to deposit into a separate
fund, to be created and maintained by such Obligated Entity, such amount as the
Commission may determine on the basis of the shortfall in units of RPO, RPO
Regulatory Charges and the Forbearance Price decided by the Central Commission;
separately in respect of solar and non-solar RPO.

o. SHARING OF CLEAN DEVELOPMENT MECHANISM BENEFIT


Entire proceeds of carbon credit from approved CDM project, to be
retained by the generating company.

p. BENEFITS UNDER THE POLICY

(i)SOLAR PV
For a single project a subsidy of Rs 10,000/kw shall be awarded by the state
government if the capital cost of the project during commissioning is in accordance
with the cost determined by the state commission during that financial year.

(ii)SOLAR THERMAL

For a single project a minimum capacity of 3 MW and a maximum capacity of 50


MW should be installed to avail the benefits.
A subsidy of Rs 1 crore per megawatt up to 5 crore (whichever is less) for a project
shall be provided by the State government.

(iii) ROOF TOP AND SMALL SOLAR PROJECTS

Projects having capacity of 1kW -1 MW shall be provided with 10% of the capital
investment and maximum of 50 lakhs (whichever is less) by the state government
if the capital cost of the project during commissioning is in accordance with the
cost determined by the state commission during that financial year.
COMPARITIVE STUDY OF SOLAR POLICIES
FINACIAL OUTLAY OF THE SUBSIDY SCHEME

YEAR SPV SOLAR ROOF TOP TOTAL


(Rs Cr) THERMAL (Rs Cr) (Rs Cr)
(Rs Cr)
2010-11 170 125 2.5 302.5
2011-12 170 125 2.5 302.5
2012-13 170 125 2.5 302.5
2013-14 170 125 2.5 302.5
2014-15 170 125 2.5 302.5
TOTAL 850 625 12.5 1512.5
SUBSIDY UNDER EACH PROJECT WILL BE DISTRIBUTED IN THREE INSTALLMENTS
BY THE STATE GOVERNMENT

INSTALLMENTS DURATION SPECIFICATIONS


1ST INSTALLMENT After commissioning of 30% of the total amount
the project & on of the subsidy.
submission of report on
the the functioning of the
plant for first six months
after commissioning

2ND INSTALLMENT After 2 years of 60% of the total amount


commissioning of subsidy

3RD INSTALLMENT After 5 years of 10% of the total amount


commissioning of subsidy

q. CRITERIA TO AVAIL BENEFITS UNDER THE POLICY


The project developer should not procure any incentive/subsidy from
central government.
PPA should be signed with state DISCOM.
Capacity utilisation factor for SOLAR PV should be more than 19% for initial
2 years of installation and in case of SOLAR THERMAL projects a minimum
of 23% CUF should be maintained.
An audited detailed report and energy generation report should be
submitted to MEDA.
COMPARITIVE STUDY OF SOLAR POLICIES
r. POLICY INITIATIVES

(i) NET METERING

Net metering will be allowed (at multiple voltage levels) to promote roof top
penetration.

Net metering facility will be extended to solar power systems installed in


commercial establishments and individual homes connected to the electrical grid to
feed excess power back to the grid with power credits accruing to the
Photovoltaic energy producer.

SOLAR PV SYSTEM SIZE GRID CONNECTED

10kWp to 1MWp 415v

>1MWp 11kv

(ii) EXEMPTION FROM PAYMENT OF ELECTRICITY TAX

Exemption from payment of electricity tax to the extent of 100% on electricity


generated from solar projects used for self-consumption/sale to utility will be
allowed for 5 years.

s. FACILITATION BY NODAL AGENCY


MEDA shall endeavour to facilitate the development of the projects in the following
areas:-

All statutory clearances from Govt. departments / Agencies.


Evacuation approval from state transmission utility.
Connectivity to the substation of state transmission utility.

t. RESEARCH AND DEVELOPMENT AND CAPACITY BUILDING


Research and development on solar technologies / solar thermal storage systems,
testing facilities towards the development of solar technologies will be encouraged.
Technology demonstrations on innovative projects in association with reputed
institutions will also be encouraged.

To effectively implement this policy and to achieve the intended objectives, the
MEDA will promote capacity building in the area of solar energy.
COMPARITIVE STUDY OF SOLAR POLICIES
17. FINANCIAL MODELLING (SOLAR PV PLANT)

INTRODUCTION

Renewable power generation capacity in India has been set up largely through private
sector investments. New investment is the most potent indicator of growth of the sector. As
per an estimate, in 2009 the total financial investment in clean energy in India was at INR
135 billion. India ranked the fourth most attractive country for renewable energy
investment in the world, only behind the United States, China, and Germany. But highly
aggressive bidding by developers in increasing fierce competitive environment and
uncertainty regarding the various costs incurred; increases the risk associated with making
an investment in setting up solar power plant.

A financial model helps the developer to explore in detail the financial benefits and costs
associated with the investment. This facilitates the identification of key variables affecting
the project value and enables financing decisions. The following section describe the key
items and assumptions that are included in the financial modeling of a typical Indian solar
PV project, and discusses the conclusions based on the calculation of various financial
parameters.

ASSUMPTIONS

(i) CAPITAL COST

The normative capital cost for setting up Solar Photovoltaic Power Project shall be Rs 800
Lakh/MW for FY 2013-14 as per MERC (Terms and Conditions for Tariff determination from
Renewable Energy Sources) Regulations, 2013. But the recent drop in module cost
accompanied by increase in level of competition has dragged down the overall project cost
quite substantially.

(ii) Annual Energy Yield

There are a number of factors (e.g. Air pollution, shading, soiling, ambient temperature,
module quality, downtime etc.) which affect the annual energy yield of a solar PV project.
The energy yield prediction provides the basis for calculating project revenue. In the
financial model energy yield prediction for 25 years is made taking into account annual
deration.

(iii) Certified Emission Reductions (CERs)

As India is a non-Annex 1 party under the UN Clean Development Mechanism (CDM),


qualifying Indian solar projects could generate Certified Emission Reductions (CERs). These
CERs can then be sold to Annex 1 parties and help them comply with their emission
reduction targets. Each CER is equivalent to the prevention of one tonne of carbon dioxide
emissions. The income from CERs can be substantial. However, this revenue source cannot
COMPARITIVE STUDY OF SOLAR POLICIES
be predicted as it is uncertain whether the project will be accredited. Moreover, CER values
fluctuate considerably. The model has the flexibility of taking into account approximate
revenue from sale of CERs

(iv) Energy Price

Solar PV plant under REC mechanism can earn its revenue from selling grey.

In the financial model it is assumed that the grey component of energy is sold to state
discom at MSEDCL. Model is made flexible to vary starting, time period after MERC will
revise and escalation factor subjected to price revision.

(v) Operations and Maintenance (O&M) Cost

One of the major benefits of Solar PV power plants is less O&M costs as compared to
other renewable energy technologies. In the financial model O&M has been taken as per
MERC Tarff Regulation, 2013.

(vi) Financing Assumptions

The general financial assumptions for a project in India are as follows:

Financing structure equity 30% and debt 70% as assumed in MERC Tariff
Order.
Debt repayment period is taken as 10 years. Interest Rate on term loan and
Working Capital is taken as 12.87% and 13.37% respectively. Though, model is
made with flexibility of varying moratorium period, repayment period, and
interest rate.

PLANT DETAILS UNITS VALUE

Installed Capacity MW 1 MW
CUF % 19%
Useful Life Years 25

CAPITAL STRUCTURE UNITS VALUE

Debt % 70%
Equity % 30%
Total Debt Amount Rs LACS 560
Total Equity Amount Rs LACS 240
COMPARITIVE STUDY OF SOLAR POLICIES

CDM BENIFIITS UNITS VALUE

CERs (10 years) Million CERs .0150


RATE PER CER Euro/ton .30
1 EURO Rs/Euro 79.22
RATE PER CER Rupees 23.77
ESTIMATED PERIOD OF Years 10
AVAILABILITY
TOTAL INCOME FROM SALE Rs lacs 3.56
OF CERS
NPV OF CARBON CREDIT Rs lacs 1.75
BENEFIT

TAXES UNITS VALUE

BASIC TAX % 30%


ADD: SURCHARGES % 5.00%
ADD: CESS % 3%
NET CORPORATE TAX % 32.45%
MIN. ALTERNATE TAX % 18.50%
ADD: SURCHARGE % 5.00%
ADD: CESS % 3.00%
NET MAT % 20.01%

DEBT SCHEDULE UNITS VALUE

LOAN AMOUNT Rs LACS 240


MORATORIUM PERIOD YEARS 0
REPAYMENT PERIOD YEARS 10
REPAYMENT STYLE MONTHLY
INTEREST ON TERM LOAN % 12.87%
INTEREST ON WORKING % 13.37%
CAPITAL

WORKING CAPITAL UNITS VALUE

O&M ECHARGES MONTHS 1


RECEIVABLES MOTHS 2
MAINTENANCE SPARES % OF O&M EXPENSE 15%
WC LOAN 100%
COMPARITIVE STUDY OF SOLAR POLICIES

O&M UNITS VALUE


O&M FY(2013-14) Rs LACS 11.23
ESCALATION FACTOR % 5.27%

DEPRICIATION UNITS VALUE

DEPRICIATION RATE FOR % 7.0%


FIRST 10 YEARS
AGGREGATE DEPRICIATION % 50%
IN FIRST 10 YEARS
TOTAL ALLOWED % 90%
DEPRICIATED VALUE
DEPRICIATION RATE FROM % 1.33%
11 YEARS ONWARDS

PROFIT & LOSS(1ST YEAR) UNITS VALUE

REVENUE Rs LACS 149.72


PBDIT Rs LACS 138.49
PBDT Rs LACS 65.23
PBT Rs LACS 22.99
PAT Rs LACS 18.39

LEVELISED BENEFIT- 1.30 RS/UNIT

LEVELISED TARIFF- 9.00 RS/UNIT

LEVELISED TARIFF WITH AD- 7.70 RS/UNIT

PROJECT ECONOMICS AND FINANCIAL INDICATORS

Project financial model calculates a range of project value indicators in order to allow
developers, lenders, and investors to assess the project economics from several
perspectives.

From an investors point of view, a project is generally considered to be a reasonable


investment only if the internal rate of return (IRR) is higher than the weighted average cost
of capital (WACC). Investors will have access to capital at a range of costs; the return arising
COMPARITIVE STUDY OF SOLAR POLICIES
from investment of that capital must be sufficient to meet the costs of that capital.
Moreover, the investment should generate a premium associated with the perceived risk
levels of the project.

Solar projects are usually financed with equity and debt components. As a result, the IRR for
the equity component can be calculated separately from the IRR for the project as a whole.
The developers decision to implement the project or not, will be based on the equity IRR.

As returns generated in the future are worth less than returns generated today, a discount
can be applied to future cash flows to present them at their present value. The sum of
discounted future cash flows is termed the net present value (NPV). Investors will seek a
positive NPV, assessed using a discount rate that reflects the WACC and perceived risk levels
of the project.

Lenders will be primarily concerned with the ability of the project to meet debt service
requirements. This can be measured by means of the debt service coverage ratio (DSCR),
which is the cash flow available to service debt divided by the debt service requirements.
The Average DSCR represents the average debt serviceability of the project over the debt
term. A higher DSCR results in a higher capacity of the project to service the debt. Minimum
DSCR represents the minimum repayment ability of the project over the debt term. A
Minimum DSCR value of less than one indicates the project is unable to service the debt in
at least one year.

Based on assumptions taken and calculations done in financial model following are values of
various financial indicators.

RETURN ON EQUITY- 45.6 RS LACS/YEAR

MINIMUM DSCR (AFTER 1ST YEAR)-1.04

AVERAGE DSCR-1.36

PROJECT IRR POST TAX WITH TAX SHELTER- 17%

MIRR POST TAX WITH TAX SHELTER- 15%

EQUITY IRR POST TAX- WITH TAX SHELTER-26%


COMPARITIVE STUDY OF SOLAR POLICIES

18. BIBLIOGRAPHY

1. www.bp.com
2. www.unfccc.int
3. www.cdmindia
4. www.wikipedia.org
5. www.cea.nic.in
29.www.energyselfreliantstates.org
6. www.cercind.gov.in
7. www.moneycontrol.com
8. www.nldc.in
9. www.iexindia.com
10. State Load dispatch centre websites
11. State electricity regulatory commission websites
12. www.mnre.gov.in
13. State energy development agency websites
14. www.nvvn.co.in
15. www.powermin.nic.in
16. www.cdmrulebook.org
17. www.solarserver.com
18. www.dsireusa.org
19. www.solarfeedintariff.net
20. www.nrel.gov
21. www.iea.org
22. www.kpmg.com
23. www.luxresearchinc.com
24. http://mospi.nic.in

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