Gujarat unveils new Solar Power policy, move to trigger growth of small scale projects

New Delhi: Gujarat Chief Minister Vijay Rupani on Tuesday announced a new Solar Power Policy, which is aimed at providing additional benefits to residential, individual and commercial developers for next 5 years.

The policy announced by CM Rupani allows the consumers to lease out their roofs or premises to third party for generation and consumption of power in the same premises.

CM Rupani said, “The State Government had implemented Solar Policy in 2015 to increase the growth of solar energy sector and provide affordable electricity to the people. Considering the overwhelming response to this policy, the Government of Gujarat is now going to implement the new “Gujarat Solar Power Policy 2021” to ensure clean, environmentally friendly and sustainable energy in the state.”

He further added that Gujarat has taken various proactive measures and made rapid strides to take the development of Renewable Energy in the state to a new height. This has resulted into overall growth of renewable energy sector and made Gujarat a leader in the country.

Mega drive to make Gujarat abundant in solar power

Increase in consumption & production of solar energy in the state will bring down production cost for industries and accelerate the ‘Made in Gujarat’ brand and increase its presence in global market.

CM Rupani added, “Gujarat model is already proving to be very important in solar power sector. Moving forward in the same direction, Gujarat Government has made an important decision to make Gujarat a hub of green energy by expanding RE generation base. Gujarat Solar Policy-2021 has been announced to accelerate the development in this sector and I am confident Gujarat will guide India in renewable energy development in the near future”.

The state government has announced several benefits that give major boost in promoting brighter future for the development of greener and cleaner renewable energy in Gujarat. Moreover, MSME and large-scale industries will be encouraged to use solar energy and thus be able to bring down their production cost.

CM Shri @vijayrupanibjp today performed e-groundbreaking of Solar Power Plant for solar powered sewage treatment plants of 16 municipalities as well as underground sewage system works at Rajpipla and also e-dedicated sewage treatment plants at Surendranagar, Valsad & Godhra. pic.twitter.com/tVt3MeKxtq

— CMO Gujarat (@CMOGuj) December 29, 2020

Giving more details about the policy, the Chief Minister said:

 MSMEs will be able to reduce their cost of production due to solar energy usage and also large-scale industries too will be able to compete in the global market
 The new solar power policy will be operative for five years i.e. up to 31.12.2025 and benefits of the solar projects set up under this policy can be availed for a project life of 25 years. Under this policy, Residential Consumers, Industrial & Commercial consumers for captive usage, Project by third party to sell power to industrial & commercial consumers, Sale of Power to DISCOMs, will be able to set up their own solar projects.

Providing details about incentives of the newly unveiled policy, Chief Minister said:

 Any person / developer / consumer can set up solar projects without any capacity ceiling while the existing ceiling of 50% sanctioned load / contracted demand has been removed.

 Consumers can set up solar projects on their roof / premises or can give their roof / premises on lease to third party for generation and consumption of power in same premises.

 Moreover, a group of consumers can set up solar projects for self consumption as collective ownership project and can consume the generated energy in the ratio of their ownership.

 The provision for security deposit to be submitted by developer to DISCOMs has been reduced from Rs 25 lakh / MW to Rs 5 Lakh / MW.

DISCOMs to purchase power from small solar projects

The state government is encouraging consumers, farmers, co-operative societies, households and small developers to set up solar projects and contribute towards the government’s initiative of development of Clean & Green energy through various policy initiatives like SURYA Gujarat Scheme, PM-KUSUM Scheme and Small Scale Distributed Solar Projects Policy 2019.

The new policy will further strengthen these efforts. In order to encourage small scale solar projects, power Distribution Companies will now purchase power from these small-scale solar projects (up to 4 MW) at 20 paise / unit tariff higher than tariff discovered through competitive bidding while DISCOMs will purchase solar power from projects above 4 MW capacity through competitive bidding process.

Chief Minister further mentioned that state government will purchase surplus energy after set off against their consumption. For Residential Consumers (Surya Gujarat Yojana) and MSMEs (manufacturing) for captive usage, DISCOMs will purchase surplus energy after set off against their consumption at Rs 2.25 per unit for initial 5 years and thereafter at 75% of latest tariff discovered and contracted by GUVNL through competitive bidding process for non-park based solar projects in preceding 6 months which shall remain fixed for remaining life of the project.

For all other consumers, it will be purchased at 75% of latest tariff discovered and contracted by GUVNL through competitive bidding process for non-park based solar projects in preceding 6 months which shall remain fixed for the project life of 25 years.

Gujarat eyes 30,000 MW solar power by 2022

Gujarat has already achieved 11,000 MW of production capacity and has set a target of producing 30,000 MW of green energy by year 2022, which will largely include wind and solar energy. Moreover, Gujarat has successfully implemented Solar Rooftop Scheme and is currently generating around 800 MW of solar energy from it. Gujarat has been ranked first in the country for largest solar rooftop installations.

Apart from launching the first solar policy in the country, Gujarat has launched “Surya Gujarat Yojana”. Government is increasing the capacity of Charanka Solar Park in Patan and works are in the implementation stage for 1,000 MW solar park at Dholera and 700 MW solar park at Raghanesda. In this way, Gujarat has also achieved a unique place in the field of renewable energy.

Solar park to save 40 mn tonnes of coal, reduce 60 mn tonnes of carbon

He added that recently Prime Minister laid the foundation stone for the World’s largest renewable energy park near Khavda in Kutch district which will be spread over 60,000 hectares of area. This hybrid renewable energy park will give a new direction to the state as far as development of solar energy is concerned.

Once this 30 GW Renewable Energy Park start functioning, it will generate around 60,000 million units of clean and green energy and this will result into reduction of 60 million tonnes of carbon. Not only this, it will also result into saving of 40 million tonnes of coal and offer employment opportunities to around 25,000 people annually. Apart from Gujarat, this RE Park will also provide energy to other states and in turn help industries of these states to generate employment.

Important incentives announced under the new policy

• Any person / developer / consumer can set up solar projects as per his requirement without any capacity ceiling
• Existing ceiling of 50% of sanctioned load / contracted demand for setting up solar project is removed
• Consumers can set up solar projects on their roof / premises or can give their roof / premises on lease to third party for generation and consumption of power in same premises
• A group of consumers can set up solar projects for self-consumption as collective ownership project and consume the generated solar energy in the ratio of ownership
• Security Deposit to be furnished by developer to DISCOMs for PPA has been reduced from Rs 25 lakh per MW to Rs 5 Lakh per MW
• New solar power policy will be operative for 5 years i.e. up to 31.12.2025. Benefits of the solar projects set up under this policy can be availed for a project life of 25 years