Policy

Govt approves setting up of 5 000 MW Solar Power Projects

The Cabinet Committee on Economic Affairs( CCEA) has approved setting up of over 5,000 MW of Grid-Connected Solar PV Power Projects with investment worth Rs 30,000 crore.
Govt approves setting up of 5 000 MW Solar Power Projects

The Cabinet Committee on Economic Affairs( CCEA), under the chairmanship of Prime Minister Narendra Modi, on Wednesday has given its approval for setting up over 5,000 MW of grid connected solar PV power projects. The work will be implemented by Solar Power Developers (SPDs) with Viability Gap Funding (VGF) under Batch-lV of Phase-ll of the Jawaharlal Nehru National Solar Mission (JNNSM). The projects will be taken up on build, own and operate basis. The total investments expected under this scheme is about Rs 30,000 crore.

“This would help in creating additional 5000 MW capacity of Grid-connected solar PV power generation projects in four trenches of each 1,250 MW capacity during four financial years viz. 2015-16, 2016-17, 2017-18 and 2018-19. This would also help in employment generation of about 30,000 people in rural and urban areas with reduction of about 8.525 Million T of CO2 emissions into environment every year,” New and Renewable Energy Ministry said in a statement..

The tenders will be State-specific based on the demand from particular State. States/Union Territories/Discoms/State Utilities are the beneficiaries. This will also facilitate to create employment and infrastructure in the States.” Installation of 5000 MW Solar PV plants will generate about 8,300 Million units per year, which caters power to almost 2.5 Million households,” the Ministry said.

The estimated requirement of funds to provide Viability Gap Funding (VGF) for 5,000 MW capacity solar projects is estimated to be Rs. 5,050 Crore (Rs 1.00 Cr / MW). This includes handling charges to Solar Energy Corporation of India (SECI) @ 1 percent of the total grant disposed and Rs. 500 crore for payment security mechanism for all three VGF schemes of 750 MW, 2000 MW and 5000 MW.

The VGF scheme will be implemented for setting up over 5000 MW capacity of grid connected solar power projects by solar power developers on build, own and operate basis through open and transparent competitive bidding to provide solar power at a pre-defined tariff of Rs. 4.93 per kWh for the first year. The overall effort is to continuously reduce Government financial support for grid connected solar power as the prices of solar power comes down.

The Scheme will be implemented by SECI as per MNRE Guidelines. SECI shall prepare necessary bidding documents for inviting the proposals for setting up of projects on a competitive bidding through e-bidding. SECI will enter into Power Purchase Agreement (PPA) with the selected developers and the Power Sale Agreement (PSA) with the buying entities.

Requisite funds for provision of the VGF support will be made available to MNRE from the National Clean Energy Fund (NCEF), operated by Ministry of Finance.

Out of 5,000 MW, some capacity in each tranche, will be developed with mandatory condition of solar PV cells and Modules made in India. This will be called the Domestic Content Requirement (DCR) category and remaining will be in open category.

Solar Power to Farmers

The Ministry has been implementing Solar Pumping programme through States, NABARD & other Government departments for setting up of Solar Power plants to pump water for irrigation purpose. The programme is demand driven. State Governments send proposals to the Ministry based on the requirements in their respective States. Ministry is providing 30 percent capital subsidy equivalent (Rs/Hp) for setting up of solar water pumping systems, limited to maximum 5 HP.  

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