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Published on July 11th, 2019 | by Anand Upadhyay


Gujarat To Subsidize Rooftop Solar Systems In 200,000 Homes

July 11th, 2019 by  

Last week, the Indian state of Gujarat announced its budget for the financial year 2019-20. The allocation of money for on-ground implementation looks good for now and indicates the state’s intentions to support renewable energy development.

State Subsidy For Rooftop Solar

While presenting the budget, The Finance Minister of Gujarat, Mr. Nitin Patel said,

“The benefit of solar rooftop scheme has been availed by 50 thousand people till date. Under this scheme, people can install solar panels on the roof of their houses and after using the solar power generated in this way, supply the surplus power to the power grid.

“I am glad to inform this August House that I announce a new solar roof-top scheme this year, whereby 2 lakh families will be covered during the year. Under this scheme, beneficiaries will be given subsidy of 40% up to 3KW and subsidy of 20% for system of 3 to 10 KW. Provision of ₹1000 crore for this scheme has been made during the current year.”

Note on numbers — 10 lakh = 1 million, 100 crore = 1 billion

(Source: Gujarat Budget Speech 2019-2020 (modified) – available here)

Gujarat will infuse capital subsidies to the tune of US$145 million, besides what has been earmarked by the Government of India. The state plans to reach 200,000 households through this initiative.

Gujarat Urja Vikas Nigam Limited (GUVNL), the holding company of the four public distribution companies in the state, will be the nodal agency to manage the state subsidy roll out.

The state subsidy scheme has been designed to mirror the one from the center. Residents can avail themselves of the 40% capital subsidy for rooftop solar systems up to 3 kW capacity and 20% for system capacities beyond 3 kW and up to 10 kW. However, only one of either the state or central subsidy aid can be used.

Increase In Gujarat’s Renewable Energy Target

Gujarat has also announced a policy to provide government waste land on lease for setting up renewable energy parks. As a result, the installed capacity will go up by approximately 30,000 MW over the next 10 years. Of this, 10,000 MW will be used to meet requirements of other states of India.

Apart from the funds for promoting rooftop solar systems, about US$1.9 billion has been budgeted for large utility scale renewable projects in the state. This would be provided to the Energy and Petrochemicals Department.

As of now, the installed capacity of wind and solar energy in the state has reached to 6,200 MW and 2,500 MW, respectively. Apart from this, the bidding process has been completed to add solar power capacities of 2250 MW, the minister shared. This includes developments in the Radhanesda Solar Park and Dholera Solar Park.

Going Beyond Mega Utility-Scale Solar Plants

Similar to what has been happening in the states of Karnataka and Maharashtra, Gujarat has decided to push the development of small-scale solar power plants which will be integrated at the feeder level. These solar plants will help improve the voltage drop and frequency at the tail end of the grid, and as a result, enhancing grid-stability and reducing losses.

For this purpose, about US$72 million will be provided in the current financial year to set up solar PV projects of 2500 MW of capacity. Gujarat State Electricity Corporation (GSEC) will develop these projects over the next two years using the government land near the substations of Gujarat Energy Transmission Corporation (GETCO).

The budget also talks about small-scale solar power projects (500kW to 4 MW) on private land. The solar electricity generated through such projects will be purchased by GUVNL at feed-in tariff. This is expected to persuade small entrepreneurs to explore investments in the solar projects. A target has been set to achieve approximately 2000 MW solar energy through this scheme.

Growth Of Rooftop Solar

As per the latest data released by Bridge to India, the total installed rooftop solar capacity stood at 4,375 MW at the end of FY19. That’s a growth of 72% over the previous year! The numbers also show that rooftop solar has been growing consistently vis-a-vis utility-scale solar in India.

India and China have both powered their solar capacity growth using large-scale solar power plants. However, due to its advantages, in the long term they both are aiming to increase the contribution from rooftop solar. India still has a long way to go before it can achieve its target of 40 GW rooftop solar set for 2022.

Promotion of rooftop is particularly important among residential consumers as the electricity provided to them in many states in India is subsidized, often at the cost of commercial and industrial consumers. In this context, Gujarat’s budget announcements are particularly important for rooftop solar development across India.

Featured image by Kyle Field | CleanTechnica

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About the Author

is a Fellow with The Energy and Resources Institute (TERI, New Delhi) and the Co-Project Manager for the "Indian Solar Market Aggregation for Rooftops" (I-SMART) project which aims to aggregate a demand of 1000 MW rooftop solar. He tweets at @indiasolarpost. Views and opinion if any, are his own.

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