Subsidies to distributed solar projects has been withdrawn by GUVNL
The withdrawal of subsidies by GUVNL to distributed solar projects will affect projects with an aggregate capacity of around 2500 MW.
The Gujarat government undertaking Gujarat Urja Vikas Nigam Limited (GUVNL) has withdrawn subsidies to distributed solar projects. Approximately 4000 projects with an aggregate capacity of around 2500 MW have been affected by the withdrawal of subsidies.
It is to be noted that a purchase price for electric power of Rs 2.83 per unit was fixed, which is extremely low compared to other states such as Rajasthan and Maharashtra.
In order to support Prime Minister’s ambitious renewable energy goals, various schemes have been planned by the state government. In line with this, the state government announced the ‘Policy for Development of Small Scale Distributed Solar Power Projects’ in March 2019, which was aimed at encouraging distributed solar energy generation in the state.
It was hoped that distribution of generation would help reduce transmission losses, along with access to electricity during the day for the farmers. Moreover, the environment would benefit, and the government at the Center and the State would receive GST revenue.
In accordance with the policy, eligible entities can generate solar power ranging from 0.5 MW to 4.0 MW and supply that power to the nearest GETCO substation.
For the registration process, MSME investors have invested approximately INR 100 crores with DISCOM/GEDA and other entities through advance charges for transmission line supervision and connectivity, so far.
Additionally, more than Rs 1,000 crore was invested by developers and a proposal for Rs 10,000 crore was received. But the Gujarat government apparently has second thoughts about providing the promised subsidies.
Gujarat tops the list for solar rooftop and ground-mounted when compared to any other state. The state’s efforts to incentivize and build a green state will be negated by this decision. While the investor’s sentiments have also been dampened; some are now looking to move to states promising higher returns.
To ensure the momentum of solar in the state, as well as to safeguard the interest of investors, developers, and MSMEs, we hope the government finds an alternate solution,” stated Ishver Dholakiya, Founder and Managing Director, Goldi Solar.
ASSOCHAM and other solar associations have also noted that these projects will provide jobs for nearly 30,000 people for at least 25 years.
Mehul Patel — President, South Gujarat Solar Association is of the view that the government needs to play a more active role in improving the livelihood of the citizens as well as providing more jobs.
He further pointed out that huge investments have been undertaken with an eye toward a good return. Without subsidies, the projects under this scheme will be completely unviable, leaving electricity producers stranded.
It is no secret that Gujarat has always been a conducive environment for solar adoption. However, the current situation has caused fear among investors. Eventually, this may lead them to move to a state with better economic prospects.
