Andhra Pradesh announces its Solar Policy

The government of Andhra Pradesh recently announced its State Solar Policy. The policy seems to be very attractive and will bring more solar developers into the state. The policy does not announce any feed in tariff or competitive bidding scheme like other state’s solar policies. It aims to develop the capacity through the REC mechanism.

The following incentives is the main attraction:

• Banking: 100% banking is permitted from January to December of the year. However, banked units can not be adjusted during February to June and during evening peak hours 6.30 PM to 10.30 PM. The banked energy will attract banking charge of 2%.
• Exemption of Wheeling and Transmission Charges: For all the intra-state open access transactions (through 33kV sys-tem), wheeling and transmission charges are exempted.
• Exemption of Cross Subsidy Surcharge (CSS): Consumers purchasing power from solar projects are exempted from CSS. This will be a great relief for consumers as CSS remains the major cause of worry for consumers as well as develop-ers opting for third-party sale / open access.
• Exemption of Electricity Duty: E-Duty is also exempted for all the solar power projects opting for third party sale and/or captive usage.
• Refund of VAT, Stamp Duty and Registration Charges: Solar developers will be able to get the refund of the said charges.

The above incentives are applicable only if the project is commissioned by June 2014. The incentives are extended for the period of 7 years.

The major concern is for the CPPs in the state as they cannot claim RECs on availing the above benefits. It will raise conflict regarding the state and central regulation on REC mechanism.

Few news coverage on the above announcement:

• AP announces solar policy sans feed-in tariff
• Andhra Pradesh’s First Solar Policy Cuts Taxes, Waives Fees
• AP solar policy worries industry experts