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Why Solar Power in India will be led by Sunny,Western States of Gujarat and Rajasthan

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Solar Energy in India represents one of the best Energy opportunities in the 21st Century.However the growth at least in the initial stages will be geographically unequal.This is due to the fact that Solar Power requires strong government support and subsidy currently.Without a proactive administration which smooths out the process of setting up a  solar plant,growth of solar energy is almost impossible.The Indian Federal Government has already given it a strong push targeting 1000 MW by 2013 and 20 GW by 2022 under the JNSSM.While the Subsidy Program is facing some initial hurdles due to debt financing and aggressive project bidding,the long term secular growth story remains good.Some states have also been aggressive in supporting solar energy namely the western states of Gujarat and Rajasthan.


These states are located near the Thar Desert and have one of the highest insolation in the country.Gujarat is one of the most industrially advanced states in the country and has been pushing renewable energy strongly.The state is promoting solar power throught both RPS and Feed in Tariffs beside promoting Solar Equipment Manufacturing as well.Here are policies promoting solar power in Gujarat.The Gujarat Government is far ahead of other states in rolling out incentives and subsidies for Green Energy.The State has already recieved proposals for setting up around  365 MW of Solar Power.Here are some of the incentives.The Gujarat Electricity Regulatory Commission is the agency responsible for the implementation of the RE policy in the state.The state has already seen giants likE Siemens setting up manufacturing plants to leverage the future growth of Clean Energy in the state.

1) RPS Incentive – Power-distribution companies have been asked to source 5% of their energy requirements for 2010-11 from renewable sources (3% in 2009-10). This will increase to 6% in 2011-12 and 7% in 2012-13. Of this, solar will have to account for 0.25%, 0.5% and 1%, respectively.

2) Solar PV Incentive – Solar producers in Gujarat using the PV technology will get Rs 15 per unit for the first 12 years and Rs 5 per unit from year 13 to year 25. By comparison, thermal and hydro cost Rs 4-6 per unit.

3) Solar Thermal Incentive – For solar-thermal producers, GERC has fixed the tariff at Rs 11 per unit for the first 12 years and Rs 4 per unit from year 13 to year 25.


The Desert State of Rajasthan has  seen an equal amount of interest by solar investors that Gujarat has.Though the government has not spelled out the Solar Subsidy Policy clearly as of now,it has got hundreds of megawatts in initial proposals from Solar Developers.The government their has given out large tracts of unused,desert land to solar developers in the western districts of Barmer,Jaisalmer which border Pakistan.The Renewable Energy Policy will probably be set out by the end of the year when these large projects can move forward to the next stage.Transparency and clarity in Policy like Gujarat will help Rajasthan go a long way in promoting Solar Energy.

Rajasthan has set up Renewable Energy Corporation Limited (RREC) to promote Solar Power in the state.The state has signed around 1524 MW of Solar Project with 49 Developers.The Solar Policy Draft Proposal is mostly vague with a target of 10-12 GW  in 10-12 years with around 500 MW in the next 2-3 years.There are little specifics with a proposal to invite bids for 100 MW of Solar Power divided equally between Solar Thermal and Solar PV.Besides the state has managed to migrate 66 MW of Solar Projects to the Federal JNNSM scheme

Other States in the Fray for Solar Leadership

The other states which are also taking aggressive steps in Solar Energy are Tamil Nadu,Andhra Pradesh and Maharashtra.Note Andhra Pradesh has become a strong center for solar cell/module manufacturing while Tamil Nadu has a strong renewable energy policy framework and industry due to its leadership in wind energy.Maharashtra is one of the most deficient industrally advanced states in renewable energy.It has come up with a large mandatory solar RPS recently.


Sneha Shah

I am Sneha, the Editor-in-chief for the Blog. We would be glad to receive suggestions, inputs & comments on GWI from you guys to keep it going! You can contact me for consultancy/trade inquires by writing an email to

4 Responses so far | Have Your Say!

  1. b u bhatia

    To popularise solar energy, subsidy details should be very clearly published in all nodal agencies’websites for all 365 days, just as published by haryana nodal agency in

  2. Sneha Shah

    Hi, Thanks for your interest in my blog. You can subscribe to my blog too. You will be receiving an email shortly from our team in this regard. Please confirm your subscription by following the link provided in that email. Also feel free to contact me at