Gujarat Solar Policy 2021. Key Points

Gujarat, with an installed capacity of close to 11,000 Mw of renewable energy has just unveiled its new solar policy, that seeks to take the state’s total renewable energy to 30,000 MW by 2022, for starters.

Chief Minister Vijay Rupani announced Gujarat’s new solar power policy on Tuesday. The new policy is expected to be valid for the next 5 years.  which will be valid for the next five years. The policy stands out for the extra freedom it gives to generators, with a focus on both the state and producers benefiting from lower costs.

The big winner should be industry, with power costs, currently at Rs 8 per unit, targeted to be brought down by 50 percent by using renewable energy

Among the key points  is the move to remove the ceiling on installed capacity. The new policy also allows consumers to lease their premises or roofs to third parties for setting up plants to generate and consume power in the same premises. In the same proportion of their ownership of the plant.

Earlier, the cap on the solar project was 50 per cent of the sanctioned load or contracted demand.

The security deposit by a developer to a power distribution company (DISCOM), has been reduced from Rs 25 lakh per MW to Rs 5 lakh per MW.

The new policy promises that the state would purchase surplus energy from residential and micro, small and medium enterprises consumers after setting off against their consumption. This means that they would be allowed to sell their surplus power at a tariff of Rs 2.25 per unit. (Gross Metering). This move, while a net positive, may not go down well with smaller producers, as net metering was a real attraction for them. This is possibly offset only by the fact that the state has done a much better job of subsidising smaller installs.

For other consumers, the surplus power will be purchased at 75 per cent of latest tariff discovered and contracted by GUVNL through competitive bidding process for non-park-based solar projects in preceding six months which shall remain fixed for the project life of 25 years.

The policy estimates savings to residential consumers in the range of Rs 1.77 – Rs 3.78 per unit, industrial and commercial (captive) in the range of Rs 2.92 – Rs 4.32 per unit and industrial and commercial (third-party sale) in the range of Rs 0.91 – Rs 2.30 per unit.

For small-scale solar projects below 4 MW, discoms will now purchase power from them with an extra incentive of 20 paise per unit over discovered price. Gujarat leads the country in solar rooftop installations, with the state having 51,000 subsidised rooftop solar plants in the residential segment — the highest in India, at the end of March 2020. Quite a contrast to neighbouring Maharashtra for instance, where the discom and poorly designed incentives have made them almost a non- starter.

The state energy minister claimed that the government was sitting on a strong response for solar projects from small industries, with bids for 2300 MW from residential, small industrial and institutional power producers having capacity between 500 KW and 4 MW at the rate of Rs 2.83 per unit. These contracts are likely to be awarded after January 2 as scheduled. With the massive 30 GW Kutch project finally kicking off and slated for completion by 2025, the state looks set to maintain its top show in the renewable space.