Centre to provide Rs 5,000 cr subsidy for rooftop solar power

In a bid to increase the use of clean energy, the Centre on Wednesday decided to scale up by nearly 10-fold the financial assistance for grid connected rooftop and small solar power plants programme to Rs 5,000 crore. "The Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi has approved the scaling up of budget from Rs 600 crore to Rs 5,000 crore for implementation of Grid Connected Rooftops systems over a period of five years upto 2019-20 under National Solar Mission (NSM)," an official statement said. This will support installation of 4200 MW Solar Rooftop systems in the country in the next five years, it said.

The capital subsidy of 30 per cent will be provided for general category States/UTs and 70 per cent for special category States including i.e., North-Eastern States including Sikkim, Uttarakhand, Himachal Pradesh, Jammu & Kashmir and Lakshadweep, Andaman & Nicobar Islands. There will be no subsidy for commercial and industrial establishments in the private sector since they are eligible for other benefits such as accelerated depreciation, custom duty concessions, excise duty exemptions and tax holiday. This capacity of 4200 MW will come up through the residential, government, social and institutional sectors like hospitals and educational institutions.

The industrial and commercial sector will be encouraged for installations without subsidy. This will create the market, build the confidence of the consumers and will enable the balance capacity through market mode to achieve the target of 40,000 MW by 2022, it added. The Government has revised the target of National Solar Mission (NSM) from 20,000 MW to 1,00,000 MW by 2022.

Of that, 40,000 MW is to come through grid connected solar rooftop systems. The approval will boost the installations in a big way and will act as a catalyst for achieving the goal of 40,000 MW. Solar power generated by each individual household, industrial, institutional, commercial or any other type of buildings can be used to partly fulfil the requirement of the building occupants and surplus, if any, can be fed into the grid.

So far, 26 States have notified their regulations to provide Net Metering/Gross metering facilities to support solar rooftops installations. Today it is possible to generate solar power from the solar rooftop systems at about Rs 6.50/kWh. This is cheaper than the diesel gen-sets based power.

This 40 GW will result in abatement of about 60 million tonnes of CO2 per year and will help to fulfil the commitment of India towards its contribution in mitigating the effect of climate change.