Generation-based incentive announced for solar power

The ministry of new and renewable energy has launched a new scheme for installation of 'megawatt capacity grid interactive solar power plants'.

Minister of state for new and renewable energy Vilas Muttemwar said that the ministry would provide financial assistance amounting to Rs12 per KW hour for power generated through solar photovoltaic and Rs10 / KW hour for solar thermal power and fed to the electricity grid. This is the first time that the government has decided to provide generation-based incentive for power generation through grid interactive solar power plants of 1 MWp capacity and above.

The 11th five-year plan has considered 50 MW solar power plants, of which up to 10MW capacity will be considered for financial subsidy,  to be implemented through the Indian Renewable Energy Development Agency (IREDA).

The private sectors is expected to invest about Rs1,000 crore and the incentive would be provided to the project developers at a fixed rate for 10 years. He clarified that this incentive would be worked out taking into account the tariff provided by the utility to the solar power producer.

The utilities are expected to purchase solar power at the rate they pay for medium term power purchase at the highest rate fixed by the state electricity regulatory commission for purchase of power for any other renewable energy source.

Muttemwar said this programme would be limited to an aggregate installed capacity of 50 MWp of Solar Power during the 11th Plan period. He also said that  that each state would be allowed to set up upto 10MWp aggregate capacity under this programme.

The developers are expected to get land allotments from the state government and enter into PPA for seeking generation-based incentive from IREDA who will approve the proposals on a first come first served basis. This scheme is also expected to increase the direct and indirect employment opportunities.

On an average each MW of solar manufacturing capacity is likely to produce 25 to 40 direct jobs and solar power plants are expected to create another 400 indirect jobs.