How much subsidy from Government of India is being offered for going Solar?

While other countries around the world look forward to seeing the sun, India receives an abundance of sunlight. This is the most important criteria for solar energy and our country already has it all. The Indian government has started to make strides towards solar energy. The government has multiplied its target and aims to achieve 100 GW of solar panel capacity by 2022.

The Indian Ministry of New and Renewable Energy (MNRE) has introduced a number of Central Financial Assistance (CFA) schemes that promote solar energy in India to achieve its ambitious target of 100 GW. The support is aimed at providing subsidies to enterprises that are contributing to growth.

Scheme: Solar Parks and Ultra Mega Solar Power Projects

  • CFA totaling INR 2 M/MW, or 30% of a project’s cost, including grid–connectivity costs, is available.
  • An additional INR 2.5 M per plant is available for the preparation of Detailed Project Reports (DPRs) and conducting surveys, etc.

Scheme: 300 MW of solar PV for defense establishments and paramilitary forces

  • Financing is made available through Viability Gap Funding (VGF), which is provided as a capital subsidy. Successful bidders are selected based on the lowest bids for these funds.
  • Considering technology upgrades and economies of scale, the upper limit of VGF was revised on February 2017, to INR 11 M/MW for all projects irrespective of size.

Scheme: Installing grid-connected solar PV power projects under Phase-II, with VGF support via SECI

  • Batch-I (750 MW) – VGF is limited to 30% of a project’s cost or INR 25 M/MW
  • Batch-III (2000 MW) – The upper limit for VGF is kept at INR 10 M/MW for the open category and INR 13.1 M/MW for projects in the DCR category
  • Batch-IV (5000 MW) – The upper limit for VGF is kept at INR 10 M/MW for the open category and INR 12.5 M/MW for projects in the DCR category
  • Batch-V (1000 MW) – for Central Public-Sector Undertakings

Schemes for grid-connected Rooftop

CFA is 30% of the benchmark cost for general and 70% CFA for the residential, social and institutional sectors. No subsidy for the commercial & industrial sector.

Schemes for development of grid-connected PV plants on canal banks and canal tops

Financial support of INR 30 M/MW or 30% of the project cost, for canal top projects and INR 15 M/MW or 30% of the project cost, for canal bank projects. Total CFA of up to INR 2.25 billion for 100 MW to be disbursed over a period of a maximum of two years, with 1% service charge to SECI

 

Off-Grid schemes: PV lighting systems and power plants, solar pumps

A. Lighting systems

  • Home lights/lanterns/streetlights with lead acid batteries: Benchmark Cost = INR 340/W; CFA = INR 102/W
  • Street lights with lithium ferro phosphate batteries: Benchmark Cost = INR 475/W; CFA = INR 142.5/W

B. Power packs with a battery bank

  • Up to 300 W: Benchmark Cost = 200/W; CFA = INR 60/W
  • 300 W to 1 kW: Benchmark Cost = INR 135/W; CFA = INR 40.5/W

C. Solar Power plants with a battery bank

  • 2 VAh/W and capacity up to 10 kW: Benchmark Cost = INR 135/W; CFA = INR 40.5/W

D. Solar Pumps from 3 HP up to 5 HP

  • Up to 3 HP (DC): Benchmark Cost = INR 120,000/HP; CFA = INR 30,000/HP
  • 3HP to 5 HP (DC): Benchmark Cost = INR 95,000/HP; CFA = INR 19,000/HP
  • Up to 3 HP (AC): Benchmark Cost = INR 100,000/HP; CFA = INR 25,000/HP
  • 3HP to 5 HP (AC): Benchmark Cost = INR 85,000/HP; CFA = INR 17,000/HP

 

The Government of India has provided many subsidies on solar power, and companies are benefiting from this. However, the road to bring these subsidies to pass is quite rough and hectic. Despite that, growth remains relatively undiminished, and India’s achievements are well known.