The Government of Telangana has recently announced its new solar policy. The new policy will be known as The Telangana Solar Power Policy 2015. The new Policy will come in force from the date of issue and will remain in operation for five (5) years and all the Solar Projects that are commissioned during the operative period will be eligible for the incentives declared under this policy, for a period of ten (10) years from the date of commissioning.

Objectives of the Policy:

The objective of the Policy includes long term energy security, sustainable fuel for energy generation, promoting solar parks in the state and promoting investment in the solar sector. The policy also targets on promoting distributed and decentralized generation and off-grid solar applications.

For availing benefits under this policy, power generated through solar projects has to be consumed within the state.

Applicability of the Policy – This solar policy shall be applicable for the following solar projects set up within the state –

1)      Solar Power Projects:

a) Grid connected solar power projects based on both Photo Voltaic (PV) as well as Solar Thermal technologies

  • Projects set up for sale of power to TSDISCOM’s.
  • Projects set up for sale of power to third parties within the state.

b) Projects set-up for captive generation/ group captive generation (including those funded and owned by developers).

2)      Solar Roof-top Projects (SRPs) (Grid connected and off grid) – This includes projects which are funded and owned by developers.

3)      Off grid applications.

4)      Any other project which is established based on MNRE/GOI Schemes as amended from time to time.

5)      Solar Parks.

 Incentives Offered:

  • Exemption from the payment of Electricity Duty.
  • Deemed Industry Status will be provided.
  • Pollution Clearance.
  • Facilitation of expeditious approvals through single window clearance.
  • Open Access will be allowed.
  • Exemption from Land ceiling Act.
  • Deemed conversion to Non-agricultural land status.
  • 100% refund of VAT/SGST and 100% refund of Stamp Duty for land purchased for setting up solar project and/or solar park.
  • Exemption from wheeling Charges for captive use within the state.
  • Exemption from payment of Cross Subsidy Surcharge for third party sale within the state.
  • Banking for 100% of energy during all 12 months of the year with must run status for Solar Power Projects.
  • Deemed Public Private Partnership (PPP) Status..
  • Non Agriculture Status for the land where Solar Power Projects will be accorded.

The policy also mentions that solar parks will host solar manufacturing, R&D centers, training facilities and financial institutions within the solar parks.

Surprisingly the policy does not talk about the REC and RPO schemes and its benefits. Also it does not give any specific guidelines about the projects to be developed under REC mechanism, which appears to be serious shortcoming.

The policy offers good number of incentives to the project developer, in terms of tax relaxations, must run status, exemptions from various charges, single window clearance etc..

Considering the state, having a huge potential of 20 GW for solar energy generation, the policy might bring substantial investment in the state. Recently the state invited bids for 2000 MW of solar projects. Now as the policy is offering numbers of incentives to the stake holders, the projects in line might see good response from the investors and stake holders.

The final state solar policy can be accessed here.