MNRE update on Grid Connected Rooftop Power Plants

The notice is regarding Central Financial Assistance (CFA) of MNRE for installation of Grid Connected Rooftop Power Plants.

The Ministry implemented a ‘Grid Connected Rooftop and Small Solar Power Plants Programme’ back in June, 2014, in which the solar rooftop plants from 1.0 kWp to 500 kWp capacities are set up. The Ministry has set a target for installation of 100 GW solar power of which 40 GW is to come from Grid Connected Rooftop Solar Power plants.

A CFA (Central Financial Assistance) of 15% was announced in August, 2015 for various categories i.e. residential, institutional, governmental and social sector. Now, CFA pattern on grid connected rooftop solar systems is proposed to be retained as per existing ongoing scheme under implementation vide no 30/11/2012-13/NSM dated 26th June 2014 with following modifications:

  1. No CFA will be provided for commercial and industrial establishments in the private sector as they are eligible for other benefits such as accelerated depreciation, custom duty concessions, excise duty exemptions and tax holiday. Further, whenever they go to State Regulators for project specific tariff, the tariff depends on whether CFA is availed or not, and the tariff is decided accordingly. Hence, CFA will give no net benefit to the commercial and industrial establishments in the private sector.
  2. For all other sectors, the CFA pattern will remain the same that is, 30% of benchmark cost for general category States/UT and 70% for special category states i.e., Sikkim, Uttarakhand, Himachal Pradesh, Jammu & Kashmir, Lakshadweep, Andaman & Nicobar Islands.

The Domestic Content Requirement (DCR) will be applicable for only those installations where CFA will be provided. No DCR will be applicable to commercial and industrial establishments in the private sector where CFA is not applicable.

The following benefits are also available for installations of Grid Connected Rooftop and Small Scale Solar Power Plants in the country besides, CFA of MNRE:

  1. Accelerated depreciation benefits for industrial and commercial buildings.
  2. Custom Duty concessions and Excise Duty Exemptions.
  3. 10 year Tax holiday.
  4. Provision of bank loans as a part of home loan/home improvement loan.
  5. Loans for system aggregators from Indian Renewable Energy Development Agency (IREDA) at concessional interest rates (9.9% to 10.75%).
  6. Loans available up to Rs. 15 Crore renewable energy projects and up to Rs. 10 Lakh for individual loans under Priority Sector Lending.

The CFA will be provided through State Nodal Agencies, State Departments, Solar Energy Corporation of India (SECI), Indian Renewable Energy Development Agency (IREDA), Empanelled Governmental Agencies/DISCOMs, PSUs of Central and State Government etc. and participating banks.

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