CSS MenuMaker
Synergymaax Image 1 Synergymaax Image 1 Synergymaax Image 1 Synergymaax Image 1 Synergymaax Image 1 Synergymaax Image 1 Synergymaax Image 1 Synergymaax Image 1 Synergymaax Image 1
Rooftop solar subsidy mechanism to continue – but will the government provide funds?  
(  0    0 )

On 26th June 2014, the Ministry of New and Renewable Energy (MNRE) announced continuation of the capital subsidy scheme for rooftop solar projects. Under this scheme, the government will continue to provide 30% of the capital cost of the projects as an upfront subsidy to rooftop projects implemented by MNRE “channel partners” or state nodal agencies. Three note-worthy tweaks have been made to the subsidy mechanism.

Firstly, state nodal agencies are expected to play a more important role in the process. The state agencies can now independently approve and implement projects up to 50 KWp each and set their own targets. Up to 10% of the financial assistance can be provided at the time of approval of these targets.

 Secondly, the maximum size for a project to avail subsidies has been raised from 100 KWp to 500 KWp.

Thirdly, the subsidy can now be availed by not only the state nodal agencies and channel partners but also directly by other agencies such as railways, defense,  public sector units and municipal corporations. All these changes are broadly positive in our view.

However, over the past 18 months, project approval under the subsidy mechanism has come to a standstill: very few subsidies were actually paid out. Due to budget cuts, the MNRE was unable to pay the subsidy. This unresolved situation has frozen the market. Customers are aware that a subsidy policy exists and expect low system prices which channel partners cannot offer. Many customers then prefer to wait for the subsidy to be available and defer going solar. This lure of subsidies even negatively affects projects that are viable without any subsidy. Clearly, a bad subsidy scheme is worse than no subsidy scheme. Recognising this, several industry representatives and industry bodies have recently asked the government to do away with the subsidy mechanism and leave the market to operate on its own (refer).

Now that the government has decided to nevertheless continue the subsidy, the question is: will it provide the funds? In the last financial year (April 2013- March 2014), MNRE had received a budgetary allocation of INR 15.2 billion (USD 250 million) for various renewable energy programs.

However, there was a mid-term course correction due to India’s current account deficit crisis and the actual disbursement ended up to be only INR 4.4 billion (USD 72 million). For the current financial year (April 2014 to March 2015), previous government in its interim budget set the disbursement target at just INR 4.26 billion (USD 70 million).

This disbursement for all of MNRE’s activities (including other renewables) needs to be revised up at least to the previously envisaged target of INR 15.2 billion (USD 250 million)  for it to have any meaningful impact on the solar rooftop market (capacity addition of 200 MW).


Jasmeet Khurana, consultant at BRIDGE TO INDIA.

Posted By    Admin  |   (Posted 6 years ago)..   |   City : Delhi
Total Comments (0)
No Comment Yet!
Add Comment
Name *
Company Name 
E-mail *
Comment *
Security Code

Enter the code shown above in the box below

E-MAIL: rk@synergymaxx.com
Tel: +91-11-25044623
Mobile: +91 9968857965
Most Popular Blogs
Accenture To Help Azure Power Expand Its Solar Generation Business
Accenture has been selected by Azure Power, India’s leading independent solar power producer, to implement an SAP&re...View More
 2014, Apr Fri  by ‘‘Admin’’
Rooftop solar powers past new milestone
More than 3 gigawatts of solar power has now been installed on Australian rooftops, which will produce enough energy over the nex...View More
 2013, Dec Sun  by ‘‘Solarneed’’
India likely to impose steep Dumping Duty on Solar Gear Importers
India is likely to impose a steep duty on importers of solar cells following vociferous complaints from domestic manufactu...View More
 2014, May Tue  by ‘‘Admin’’
Solar energy ambitions take shape as costs tumble
Solar energy ambitions take shape as costs tumble
Written by Akshata
View More
 2014, Feb Sun  by ‘‘Admin’’
Latest News
Installation of 2Kw rooftop with Battery bank in Gurgaon
Synergy Maxx team has installed it 2Kw rooftop system in Sushant Lok-2,Gurgaon we are executing next 5KW and 10KW project in Gurgaon soon.

Commissioning of 2KW and 10KW solar System In Haryana
Synergymaxx team is commissioning one 2Kw rooftop system and second 10KW rooftop in Haryana.

JA Solar has signed an MOU with Essel Infraproject Ltd
JA Solar has signed an MOU (memorandum of understanding) with Essel Infraproject Ltd (EIL) in India for a JV solar cell and module manufacturing plant in India. Essel Infraproject is the PV project and infrastructure arm of Essel Group.

Haryana makes solar power must for all buildings
The Haryana government has decided to usher in the New Year with one of the biggest pushes for solar power in the country. The state has made it mandatory for all buildings on plot size of 500 square yards or more to install rooftop solar power systems by

Synergymaxx New Installation 1Kw solar Roof top
Synergymaxx has installed 1kw Solar rooftop system with battery backup in Bijnor where electricity cut is for 6-8 hours. we are working towards our goal to enlighten future of next Generation.

Home     About Us     Contact Us     Top Blogs   ABC's Of Solar
Copyright © 2013-14