Incentives for Solar Developers:Generation Based Incentives

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Discusiion on incentives available to developers of solar power projects in India.

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Incentives for Solar Developers:Generation Based Incentives

  1. 1. Incentives for Developers: Generation Based Incentives <ul><li>Generation Based Incentives (GBI) </li></ul><ul><li>The key attributes of the GBI scheme are: </li></ul><ul><li>Eligibility: Any project that is commissioned after 31st December, 2009 </li></ul><ul><li>A maximum incentive with a 5% reduction and ceiling of Rs. 11.40 per kWh. </li></ul><ul><li>The generation-based incentive will continue to decrease as and when the utility signs a PPA for power purchase at a higher rate. </li></ul>
  2. 2. Incentives for Developers: Generation Based Incentives <ul><li>Generation Based Incentives (GBI) </li></ul><ul><li>Grid interactive solar power generation under the GBI scheme </li></ul><ul><li>The high cost of solar PV equipment results in a higher cost of </li></ul><ul><li>generation, which restricts the growth of power generation through </li></ul><ul><li>solar PV. </li></ul><ul><li>MNRE has decided to support large-sized grid interactive solar power </li></ul><ul><li>generation projects as demonstration projects. The Ministry recently </li></ul><ul><li>announced a Generation Based Incentive (GBI) scheme to support a </li></ul><ul><li>total capacity of 50 MWp from 2007 to 2012. </li></ul>
  3. 3. Incentives for Developers: Generation Based Incentives <ul><li>Generation Based Incentives (GBI): </li></ul><ul><li>The key attributes of the GBI scheme are: </li></ul><ul><li>Solar PV power generation plants of a minimum installed capacity of 1 MWp per plant; either a single unit or modular units at a single location will be eligible for generation based incentive. </li></ul><ul><li>However, 1 MWp capacity may be setup through modular units at a single location. </li></ul>
  4. 4. Incentives for Developers: Generation Based Incentives <ul><li>Generation Based Incentives (GBI) </li></ul><ul><li>The key attributes of the GBI scheme are: </li></ul><ul><li>The GBI scheme guarantees an overall tariff of Rs. 15 </li></ul><ul><li>per kWh for solar PV, </li></ul><ul><li>Which consists of GBI (GBI is a much higher component </li></ul><ul><li>than the tariff offered by the state government) and the </li></ul><ul><li>preferential tariff offered by the state utility. </li></ul>
  5. 5. Incentives for Developers: Generation Based Incentives <ul><li>Generation Based Incentives (GBI) </li></ul><ul><li>The key attributes of the GBI scheme are: </li></ul><ul><li>(i) Utilities would offer rates as per tariff order or equal to highest rate </li></ul><ul><li>offered by any other source for which guidelines are issued by the </li></ul><ul><li>SERC. </li></ul><ul><li>Wherever the SERC has fixed a separate tariff for solar power </li></ul><ul><li>or tariff for the period for which the Ministry is providing incentive, </li></ul><ul><li>the utilities will offer a minimum of that tariff to the solar PV grid </li></ul><ul><li>interactive power projects in their respective states. </li></ul>
  6. 6. Incentives for Developers: Generation Based Incentives <ul><li>Generation Based Incentives (GBI) </li></ul><ul><li>The key attributes of the GBI scheme are: </li></ul><ul><li>In the absence of such tariff orders, the utilities will </li></ul><ul><li>offer the highest tariff for purchase of power to the </li></ul><ul><li>solar PV power project developers. </li></ul><ul><li>(ii) In addition to the preferential tariffs offered by the state, the </li></ul><ul><li>Ministry/MNRE may provide GBI of a maximum </li></ul><ul><li>incentive of Rs. 12 per kWh to SPV and Rs. 10 per kWh </li></ul><ul><li>to STP. (GBI = Rs 15 per unit – state utility tariff) </li></ul>
  7. 7. State Wise Incentives For Developers; West Bengal <ul><li>West Bengal </li></ul><ul><li>WBERC came out with a tariff order for solar energy on March 25, 2008. </li></ul><ul><li>As per the WBERC tariff order, the eligible grid connected solar PV </li></ul><ul><li>power plant should be of capacity ranging from 1.0 MWp to 5.0 MWp. </li></ul><ul><li>The highest tariff in West Bengal currently is Rs 4/unit. Hence, a </li></ul><ul><li>developer who avails the GBI scheme for setting up a plant in West </li></ul><ul><li>Bengal in FY09 can enter into a PPA of Rs. 4/unit with the distribution </li></ul><ul><li>licensee. </li></ul><ul><li>To support This tariff, the developer will additionally be given </li></ul><ul><li>incentive of Rs. 11/unit of power generated under the GBI scheme from </li></ul><ul><li>MNRE. </li></ul>
  8. 8. State Wise Incentives For Developers; West Bengal <ul><li>West Bengal </li></ul><ul><li>On withdrawal of the incentive by MNRE, the commission will review the sale </li></ul><ul><li>price. </li></ul><ul><li>The capped price of energy for grid connected solar PV plants </li></ul><ul><li>(including those plants which are availing accelerated depreciation benefit </li></ul><ul><li>and are not eligible for GBI declared by MNRE, shall be Rs.11.00/kWh for </li></ul><ul><li>sale to the distribution licensees. </li></ul><ul><li>This tariff will be applicable for the grid connected solar PV projects </li></ul><ul><li>commissioned up to 2009-10 and shall remain valid for 10 years from the </li></ul><ul><li>date of coming into force of these regulations. </li></ul><ul><li>Similarly, the sale price for the units for the electricity generated from the </li></ul><ul><li>plants commissioned after 2009-10 but on or before March, 2012 will be </li></ul><ul><li>Rs.10/kWh which shall remain valid for 10 years </li></ul>
  9. 9. State Wise Incentives For Developers; West Bengal <ul><li>West Bengal </li></ul><ul><li>At any stage in the future, </li></ul><ul><li>if any solar PV plant, which was ineligible for the </li></ul><ul><li>generation based incentive, becomes eligible for the incentive declared by MNRE or by the State or Central Government, </li></ul><ul><li>The SERC may review the rate of Rs.11.00/Kwh or Rs.10.00/kWh, as the case may </li></ul><ul><li>be, for sale to the Licensees and fix a new rate by taking into consideration the </li></ul><ul><li>Allowable incentive to such solar PV plants. </li></ul><ul><li>Any incentive received by the licensee from </li></ul><ul><li>MNRE on this account shall be passed on to their purchasers of electricity. </li></ul><ul><li>The SERC will take a fresh view on the price cap for grid connected solar PV </li></ul><ul><li>Projects commissioned from 2012-13 onwards. </li></ul>

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