India Tariffs

State-led incentives in India are helping the solar industry flourish. According to figures released by market research company, Bridge to India, tariffs have fallen 63% in the last three years, with an average price of INR7.7. The lowest tariff is in the state of Andhra Pradesh at INR6.5.

Updates

Update Nov 01, 2013

India’s Ministry of New and Renewable Energy (MNRE) has finally received funds to pay a 30% subsidy promised to rooftop solar installations.

The 30% subsidy is to help reduce the cost of a total of 25MW of rooftop installations, on government rooftops, of 3-100kW in size.The subsidy also previously applied for installations up to 500kW in size, but budgetary constraints lowered the upper limit to 100kW. No residential solar is included in the 25MW subsidy’s budget allocation.

Update Sep 01, 2013

According to figures released by market research company, Bridge to India, tariffs have fallen 63% in the last three years, with an average price of INR7.7. The lowest tariff is in the state of Andhra Pradesh at INR6.5.

Solar policies:Jawaharlal Nehru National Solar Mission Mar 01, 2013

The Indian MNRE introduced the Integrated Energy Policy to expand its energy supply options with alarge-scale solar projects of 10GW by 2017.

The MNRE announced plans to adopt a viability gap funding (VGF) model for the second phase of its Jawaharlal Nehru National Solar Mission (JNNSM), to provide financing to grid-connected solar power projects.

Solar policies:Jawaharlal Nehru National Solar Mission Mar 01, 2013

The Indian government is considering postponing bids for the second phase of the JNNSM to the end of April or beginning of May, to decide whether to include thin-film in its domestic content requirement.

Update Mar 01, 2013

The Indian state of Uttar Pradesh has released a tender for the procurement of 200MW of solar PV. The Uttar Pradesh state utility company will offer a power purchase agreement lasting 10 years – the shortest time frame amongst all other state policies. Winning bids are expected to receive approval by 10 June 2013.

Update Mar 01, 2013

The government of Kerala has released a draft solar policy, set from 1 April 2013. Under this policy, the government's target is  to reach 500MW by 2017 and 1,500MW by 2030.

Tamil Nadu Mar 01, 2013

New net meters will be provided by Tamil Nadu for the residential rooftop PV systems installed under the Tamil Nadu’s net metering scheme.

Update Feb 01, 2013

The India-based Power Finance Corporation has announced a 0.50% cut for renewables projects. The company's interest rates have dropped by 50 basis points.

Andhra Pradesh Jan 01, 2013

The south-eastern Indian state of Andhra Pradesh has issued a tender for up to 1GW of solar capacity to be built in 2013. The Transmission Corporation of Andhra Pradesh, a state energy holding company, is inviting bids for projects of between 1 and 20MW.

Solar policies:Jawaharlal Nehru National Solar Mission Dec 01, 2012

India’s Ministry of New and Renewable Energy (MNRE) has issued a draft solar policy for Phase II of the country’s Jawaharlal Nehru National Solar Mission (JNNSM), outlining its strategy to install 10GW by 2017 through mostly utility-scale projects.

Update Dec 01, 2012

A report by the Climate Policy Initiative and the Indian School of Business has shown that Indian renewable energy projects are more expensive than either in US or in EU.

An additional cost of 24-32% occurs due to the high interest rates and the short-term loans for renewable energy projects, acting as an obstacle for the country's progress in its renewable energy target.

Tamil Nadu Dec 01, 2012

The Indian state of Tamil Nadu has announced the auction of 1GW of solar capacity for 2013 in order to meet its target of 3GW by 2015. Bidders will also need to provide proof of purchase of landto complete the development and will have 10 months within which to bring it online.

Tamil Nadu Oct 01, 2012

The government of Tamil Nadu, India, has committed to generate 3,000MW of solar power by 2015(1,000MW per year) through its newly launched Solar Energy Policy 2012, according to reports.

The Indian state of Tamil Nadu received only 499MW of bids for 1,000MW of solar projects that it opened to tender at the beginning of the year. In what analysts said was a "lukewarm" response, the tender received 92 bids, 38 of which were for 1MW projects, and despite there being no capacity limits, the highest capacity was 50MW, for which there was only one bid.

The 50MW bid was from Sun Edison, which is understood to have submitted similar sized bids in three separate tenders. Other companies included Waaree with 10MW and Welspun with 30MW.

Other options
Renewable Purchase Obligations

The Central Electricity Regulatory Commission has introduced RPOs particularly for solar power although it does also apply to other renewables. Solar RPOs are the minimum amount of solar energy that obligated entities – distribution licensees, open access and captive consumers (1MW and above) – have to have as a percentage of their total available electricity. Currently these are set at around 0.25% of the total consumption of state utilities and vary across states.

Renewable Energy Certificate Mechanism

These can be generated by any developer who sells solar power to the public grid at the Average Pooled Purchase Cost of the relevant distribution utility or sells solar power to third-party consumers at a mutually decided price. RECs are not applicable to projects in which power is sold to the grid at a preferential tariff. Power producers who have begun to sell power at a preferential FiT are not then allowed to later switch to the REC Mechanism.

Update Sep 01, 2012

With solar PV capacity rising from under 20MW to more than 1,000MW in two years, all eyes are turned towards India. The latest energy report from KPMG, predicts that India has a solar market potential of 12,500MW, calculated to be reached by 2016-17.

State-led incentives in India are helping the solar industry flourish. According to figures released by market research company, Bridge to India, the PV industry is gaining ground, with installed capacity growing from 24MW at the end of 2010 to 153MW at the end of 2011. The market is supported by FiTs to provide an initial thrust while the introduction of the Renewable Energy Certificate (REC) mechanism and Renewable Purchase Obligations (RPOs) will help India's progression within the solar market. However, reverse-bidding auctions in some areas are reducing the profitability of FiTs.

Currently, a unit of power from an off-grid solar system currently costs about US$0.29- US$0.32 per kWh. The cost of grid electricity is about US$0.10 - US$0.13 per kWh, but competitive by comparison to diesel generators US$0.27 - US$0.40, making solar an increasingly attractive energy solution.

The Kerala State Electricity Board (KSEB) is reportedly seeking approval for proposals to install 300MW of off-grid PV and has submitted plans to the Indian state’s electricity regulatory commission.

Energy minister of Punjab, India, Bikram Singh Majithia announced new financial incentive. The government will provide a 50% exemption on electricity duty on power used during the construction period by the investors alongside, a 100% tax exemption to the project developer and VAT exemption on equipment used.

Solar policies:Jawaharlal Nehru National Solar Mission Aug 02, 2012

The Indian Centre for Science and Environment (CSE), is accusing US thin-film manufacturers of using a loop hole in the Indian government’s renewable energy scheme to “ruin the Indian domestic PV industry”. 

Approved on January 11, 2010, by the National Action Plan on Climate Change, the JNNSM aims to establish India as a global solar leader, to reach a target of 20GW of solar capacity by 2022 from the 81MW currently being produced.

JNNSM is divided into three phases with the ultimate goal of reaching grid parity with coal by 2030.

Phase I
Date to be achieved: 2012 and 2013
Target capacity: 1100MW

Phase II
Date to be achieved: 2013 to 2017
Target capacity: 3000-10,000MW

Phase III
Date to be achieved: 2017 to 2022
Target capacity 20,000MW

The JNNSM also hopes to deploy 20 million solar lighting systems for rural areas, achieve 15 million square meters by 2017 and 20 million by 2022 of solar thermal collector area. Its aim also takes into consideration manufacturing; it hopes to reach 4-5GW equivalent of installed capacity by 2020, including the manufacture of polysilicon to annually make about 2GW capacity of solar cells. In terms of off-grid solar projects, JNNSM has set a target of 1000MW by 2017.

The incentives offered are as follows:
• Zero import duty on capital equipment, raw materials and excise duty exemption
• Low interest rate loans, priority sector lending
• Coal tax
• Budgetary Support for MNRE

According to the Ministry of New and Renewable Energy, so far, 1000MW of projects – 500PV and 500CSP across batch 1 and batch two of phase 1 – have been sanctioned during 2010-2011.

Gujarat Solar Policy Aug 01, 2012

The state of Gujarat was the first to launch its own solar policy in 2009, with the intention of remaining operative until 2014. The initial target was to achieve 500MW; however, given the level of interest, the government has allocated projects with 935MW. It is the only policy which has awarded projects a fixed FiT on a first-come-first-served basis.

                                                 Levelized tariff    For first 12 years    For next 13 years
For projects commissioned
before January 28, 2011              $0.27 per kWh       $0.29 per kWh            $0.10 per kWh
For projects commissioned
post January 28, 2011                 $0.21 per kWh     $0.24 per kWh           $0.13 per kWh
 

Rajasthan Solar Policy Aug 01, 2012

Launched in July 2011, it has a target of 12GW to be installed by 2022. In the first phase, PV projects worth 300MW will be awarded through a competitive bidding process which took place at the end of 2011. Projects will then need to be installed by 2013. Due to its high irradiation levels and availability of space, Rajasthan will likely become the hub of solar power generation in Indi

Karnataka Solar Policy Aug 01, 2012

Also announced in July 2011, this policy has a target of 350MW by 2016. Karnataka is looking to attract investors that are interested in developing smaller plants for a more decentralized energy supply.

Madhya Pradesh Aug 01, 2012

The region currently has an installed capacity of 2MW with plans to further expand renewable power generation capacity. The government of Madhya Pradesh has issued an Incentive Policy for encouraging generation of power through Non-conventional Energy Sources (2006). The policy targets up to 500MW of new solar installations.

The government has also launched the Madhya Pradesh Urja Vikas Nigam, a government agency, to promote renewable energy in the state.

Under the JNNSM, three 100MW projects have been registered with 17 more planned, with 270MW of new capacity.