Cabinet approves ₹ 5000 crore for promotion of Solar Rooftops in the country

The Cabinet Committee on Economic Affairs, chaired by the Prime Minister Shri Narendra Modi has approved the scaling up of budget from ₹ 600 crore to ₹ 5,000 crore for implementation of Grid Connected Rooftops systems over a period of five years upto 2019-20 under National Solar Mission (NSM). This will support Installation of 4200 MW Solar Rooftop systems in the country in next five years.

The capital subsidy of 30% will be provided for general category States/UTs and 70% for special category States 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 etc,

This capacity of 4200 MWp will come up through the residential, Government, Social and institutional sector (hospitals, educational institutions etc.). Industrial & 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 MWp by 2022.

The Government has revised the target of National Solar Mission (NSM) from 20,000 MWp to 1,00,000 MWp by 2022. Out of the 40,000 MWp is to come through grid connected solar rooftop systems. This approval will boost the installations in a big way and will act as a catalyst to achieve the goal of 40,000 MWp.

Background:

A large potential is available for generating solar power using unutilized space on rooftops in buildings. 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 Tar, 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 ₹ 6.50/kWh. This is cheaper than the diesel gen-sets based electricity generation. It is also cheaper than the cost at which most DISCOMs would make power available to the industrial, commercial and high-end domestic consumers.

With the new initiative, India will emerge as a major country utilizing the roof space for solar rooftop systems on such a. large scale: 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.

Solar rooftop subsidy policy expands support for residential and institutional installations, excluding commercial and industrial subsidies. The government approved a scaled-up budgetary allocation under the National Solar Mission to promote grid connected rooftop solar systems, targeting 4,200 MW over five years in residential, government, social and institutional sectors. The policy provides capital subsidies of 30% in general category States/UTs and 70% in special category States/territories, excludes subsidies for private commercial and industrial establishments, and relies on regulatory measures like net metering to catalyse market uptake toward national rooftop and overall Mission targets.