Bogged down by subsidy dispersal issues, and taking a cue from falling prices in the solar market, Ministry of New and Renewable Energy (MNRE) has decided to limit consumers who can avail subsidy benefits for installation of rooftop solar power plants. The Ministry has also indicated that it might be readying itself to reduce the quantum of available subsidy.
This one is pure logic. Consumers who are paying higher tariff for conventional power and for whom solar rooftops are viable even without any subsidy, will from now on not be able to avail subsidy benefit. The rate of solar power announced by Central Electricity Regulatory Commission (CERC) will be the benchmark for deciding who can or cannot receive the aid.
In doing so, the notification also points out that a number of incentives are already available to consumers. This includes — accelerated depreciation for industries and commercial establishments, net metering, and state-specific subsidies across the country.
In a major decision, MNRE has indicated that it could also reduce the subsidy from the current 30% to 15%. A detailed notification is expected to be released in the near future. The Ministry has cited limited availability of funds as a major reason for these revisions. The Ministry has prioritised sectors which can claim the subsidies — check the notification for more details.
In a welcome break, MNRE has also advised the government agencies and system integrators to set up grid connected rooftop projects without waiting for subsidies but keeping in view of the viability of the project.
MNRE had already ended the central financial assistance of 30% capital subsidy for solar water heaters. While a lot of hue and cry is expected in the short term from PV installers who were solely dependent on subsidies for their business, this is a step in the right direction and will be a boon to installers that are more competitive.
Check out more India solar news here.
Image Credit: National Institute of Solar Energy, India
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