Introduction of financial incentive for states is expected to address two major issues plaguing solar park developers — shortage of land and lack of transmission facility.
The Ministry of New and Renewable Energy has written a letter to the principal secretaries of all states notifying about the introduction of a financial incentive for states under the solar park scheme 2.0.
As reported by ET, the letter stated that states will earn Rs 0.02 for every unit of power produced at the solar parks, irrespective of where it is supplied.
The letter is also addressed to the managing director of the Solar Energy Corporation of India (SECI) and solar park developers.
The introduction of financial incentive for states is expected to ease the problem of acquiring revenue or private land for projects auctioned by SECI, nodal agency for conducting wind and solar auctions.
Developers will bear the fiscal incentive
According to the letter, this fiscal incentive of Rs 0.02 per unit will have to be borne by the developer, but it will be allowed to add it to the tariff while bidding at auctions.
The Ministry said the onus of external transmission from solar parks will be on SECI and the cost of transmission facilities will be drawn from the Central Financial Assistance it provides for setting up the parks, the ET report noted.
As mentioned in the letter, internal infrastructure of the renewable energy park like internal power evacuation system, road, water, levelling of land, fencing, telecommunication and other facilities would be done by the developer at its own cost.
SECI also plans to set up a payment security fund (PSF), a risk mitigation mechanism to ensure regular payment of dues even if discoms drawing power delay payments citing funds crunch.