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State of Solar Energy in India – Maharashtra,UP,Delhi formulate Solar Subsidies though far behind Gujarat

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Solar Power  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 subsidies currently.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,individual States are forging ahead to push Solar Energy on their own.Gujarat has been a trailblazer in this regard with The State has already received proposals for setting up around  365 MW of Solar Power.Gujarat through its own RPS and Feed in Tariff incentives is targeting 1000 MW by 2013.Rajasthan too is trying to exploit is massive solar insolation potential but its state policies have little clarity or direction yet.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.Rajasthan is set to see massive solar installation despite its government’s vagueness from the Federal JNNSM subsidy.Other states in India like UP,Delhi and Maharashtra have recently started making some moves but remains to be seen how good they are at implementing.Delhi seems to be on the way to implementing a smart policy of promoting small roof top solar residential installations.

National Solar Mission of India ( Understanding the Federal Subsidies and Incentives)

India launched its Solar Mission by the name of Jawaharlal Nehru National Solar Mission (JNNSM) with a lofty target of 20 GW by 2022.The Solar Mission has been divided into 3 phases and promotes solar energy installation,solar industry,solar heaters and off grid solar.

Objectives of the Solar Mission in India

1) Solar Lighting-Deploy 20 million solar lighting systems for rural areas

2) Solar Heaters – Achieve 15 million sq. meters  by 2017 & 20 million by -2022 of solar thermal collector area

3) Solar Manufacturing – Global Leader in Solar Manufacturing ( Seems a Pipe Dream right now) with Targets 4-5 GW equivalent of installed capacity by 2020 including setting up of dedicated manufacturing capacities for poly silicon material to annually make about 2 GW capacity of solar cells

4) Off Grid Solar Applications – Solar Mission has set a target of 1000 MW by 2017

First Phase

1) First Phase (How it has fared so far)

Smaller 2 MW PV Projects

India has set a target of 1100 MW for the first phase with around 100 MW allocated for 2 MW projects which have the best chance of being built.Note the 2 MW project winners are already flipping the projects as many non-serious players won the projects.These companies were speculators and has no intention of building the plants anyway

Larger PV 5 Projects and Bigger Solar Thermal Plants

The rest of the 620 MW projects are in serious trouble with no major construction happening.The developers might find it profitable to lose their deposit money rather than building the plant.The government will have to potentially bailout these companies if it wants to see its Solar Mission be successful.While the first phase is already in trouble the government is already thinking of auctioning another 296 MW of solar projects in April.Don’t know how that will help as the majority of the First Phase projects are already in trouble

2) Phase II (2013-2017) – Remaining 4 yrs of 12th five yr plan Target of 3000-10000 MW
3) Phase III (2017-2022) – 13th five yr plan 20000 GW overall

Funding of Solar Mission and Role of CERC and NVVN

In order to facilitate grid connected solar power generation in the first phase, a mechanism of “bundling” relatively
expensive solar power with power from the unallocated quota of the Government of India (Ministry of Power) generated
at NTPC coal based stations, which is relatively cheaper, has been proposed by the Mission. This “bundled power”
would be sold to the Distribution Utilities at the Central Electricity Regulatory Commission (CERC) determined prices.
The Mission also provides for NTPC’s Vidyut Vyapar Nigam Ltd or NVVN to be the designated Nodal Agency for
procuring the solar power by entering into a Power Purchase Agreement or PPA with Solar Power Generation Project
Developers who will be setting up Solar Projects during the next three years, i.e., before March 2013 and are connected
to the grid at a voltage level of 33 kV and above. For each MW of installed capacity of solar power for which a PPA is
signed by NVVN, the Ministry of Power (MoP) shall allocate to NVVN an equivalent amount of MW capacity from the
unallocated quota of NTPC coal based stations and NVVN will supply this “bundled” power to the Distribution Utilities.
This Scheme is referred to as the ‘Bundling Scheme’ in these guidelines. – Source MNRE


1)Titan Energy ,KPCL ,3 MW plant ,Yelesandra village near Bangarpet, Kolar district,Karnataka

2) Photon Energy Systems 3 MW plant ,Itnal & Chikodi towns, Belgaum, Karnataka State.

3) Titan Energy, 2 MW plant ,Jamuria, West Bengal

4) Moser Baer ,Thin Film 1 MW , Chandrapur Maharashtra

5) Lanco , 5 MW ,Gujarat.

6) North Delhi Power Ltd (Tata Power) 1 MW , Delhi.

7) Reliance ,1 MW ,Thyagaraj stadium Plant,Delhi

8) Azure Power  2 MW  Awan, Punjab India.

State Level Subsidies and Progress

Note Indian States have also raised objections to the conduct of the First Phase of JNNSM particularly how the migration projects have been given the full subsidy while other projects are being built at much lower costs.80 MW of Solar Projects were awarded the base FIT of Rs 17.91 as they were transferred to the Indian Federal Subsidy from their initial PPAs with individual states.Note these solar project developers who have managed to get transferred will get tariffs which are almost 60% higher than the lowest bidder for the 5 MW Solar Project at Rs 10.95.This will also mean a much large taxpayer outgo to the 16 Project Winners for the 80 MW than for the 150 MW projects.Note the earlier auction of 100-2000 kw also took place at higher FIT of Rs 17.91 and those winners are already flipping their projects selling their licenses for massive profits.Note their is not much difference in costs for a 2 MW project as compared to a 5 MW project so even this part of the Subsidy raises questions.Till now the JNNSM has not proved to be much of a success failing to create a conductive environment for the growth of solar energy in India.However the potential of future growth in India remains immense despite this.


Gujarat has been the biggest promoter of Solar Energy in India amongst all the other states.The State has already implemented a clear and forward looking Renewable Energy Policy with emphasis on Solar Energy.It has signed PPAs with a number of solar project developers under its State Solar Subsidy Scheme.While other states are looking mainly towards the federal subsidy scheme JNNSM to push Solar Energy Generation,Gujarat is looking to push Solar Energy on its own.Gujarat now has reportedly acquired 3000 acres at Charnaka village in Patan District which it will give to solar project developers to install solar panels.In the First Phase of this projects,80 Developers will install 1-45 MW Solar Plants to generate 500 MW capacity.The next phase will feature another 500 MW of capacity.


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

Uttar Pradesh

India’s largest state in terms of population suffers from the worst power cuts in the country with cities like Kanpur,Meerut,Agra facing brownouts of 8-10 hours on a regular basis.Having a diesel generator or a lead acid storage device is a must for households in these states making it a prime demand source for solar energy.The state recently came out with a tender for 100 MW of solar installations at a  electricity tariff of 4.74 rupees ($0.11) a kilowatt-hour.The EOI at the UPPCL website mentions a bundled/standalone rate for the solar power to be supplied.As it is evident no one can make money at this tariff from standalone it would mean bundling of solar with cheaper power sources.Again the EOI is vague and short on details with just 2 paragraphs.

Uttar Pradesh Seeks 100 Megawatts of Solar Power to Meet Target

India’s Uttar Pradesh state is seeking to buy 100 megawatts of power from solar plants to meet government-set clean energy targets.Uttar Pradesh Power Corp., the bulk electricity supplier to the northern state’s five distribution utilities, will pay a maximum of 4.74 rupees ($0.11) a kilowatt-hour, it said in a tender notice in today’s Economic Times.For the financial year starting today, state electricity distribution utilities are required to purchase 5 percent of their power from clean sources, 0.5 percent from solar and the remainder from wind, biomass and others


The state with the largest installed electricity capacity in the country is lagging far behind in renewable energy generation.It has recently promoted Wind Energy through new incentives and seems set to promote Large Solar Power Plants above 5 MW

State to come up with policy to encourage solar energy

With a view to encourage solar energy projects in Maharashtra, state government is coming up with a policy.”The government is framing the policy to promote solar power plants of 5 MW or more capacity in the state,” Non-Conventional Energy Minister Ganesh Naik informed the Legislative Council in a written reply last week.


India’s Capital has come out with a target of 20 MW in 3 years by giving a generous 37c/Kwh Feed in Tariff for residential owners in the capital.The state government has allowed residential owners to get a 19% IRR for putting up solar panels on their roof.

Govt readies plan on rooftop solar panel units

After almost two years of discussion, the Delhi government has come up with a Cabinet note for solar power units on rooftops of households in the Capital.

House owners can either lease out their roof to a developer, who will then set up the unit, or they can pay 30 per cent of the cost of installation. The remaining 70 per cent will be financed through banks.House owners will get to earn Rs 17 per unit of power produced through the solar panels, which will be directly fed into a grid. They can sell the power for 25 years. “The house owner will easily be able to earn about 19 per cent returns on his investment. In nine years, the returns will go further up. There will also be an income tax rebate on this investment,” said a senior official.The cost of setting up a 5-KW unit is around Rs 7.5 lakh and requires 2,000 sq feet of roof space. After signing a Power Purchase Agreement with the discoms, the house owner will pay Rs 3 lakh, on which he will get returns of close to Rs 60,000 per annum.”More than 50 per cent of Delhi residents live in their own homes, and, on an average, an upper-middle class family has this kind of roof space available with them,” added the official.

State of Solar Energy in India – Maharashtra,,UP,Delhi Formulate solar subsidies though far behind Gujarat

Abhishek Shah

5 Responses so far | Have Your Say!

  1. Panchabuta

    A small clarification as we understand it. Uttar Pradesh as per the EOI has invited bids for solar power at a bundled price of Rs.4.70 and that is not as ridiculous as it sounds if you understand how bundled power works.

  2. Abhishek Shah

    Thanks,My mistake as Bloomberg report did not have much details. Have clarified the Blog Post.The EOI which I read after your comment does seem vague and short on details.Why take bundled power instead of buying solar power with a higher tariff which would seem logical

  3. Vishal K Tiwari

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  4. Gaurav

    In existing solar farm the name of Reliance Industries Solar group’s 5MW located at Khimswar,Jodhpur,Rajasthan is missing. This plant is operational since 14July 2010 and have 4.8MW solar PV and rest 200KWp is having different technologies. The best plant as of now in India. Please visit RREC website for the detailed presentation