Rooftop solar plant installations finally receive subsidy

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solarrooftopsThursday, August 21, 2014: Ministry of New and Renewable Energy (MNRE) has received funds with which they can pay a 30 per cent subsidy for rooftop solar plant installations. This subsidy will reduce the cost of a total of 25 MW of rooftop installations, which also include the government buildings’ rooftops of 3-100kW in size.

Though this development has happened, some installers are still not very sure about the scheme in future. An announcement was made on 12 August which was highly awaited after deferred payments in earlier days. These kinds of delays created a huge back log in projects. The 30 per cent subsidy has been applied for installations previously too but the upper limit was always constrained to 100kW due to limited budget.

Projects need to have completed installation and payments for getting eligibility for the subsidy and they shouldn’t have any bearing on other JNNSM scheme also for the solar projects. India’s National Clean Energy Fund (NCEF) provided the financial support and the funding has been announced for off-grid and decentralised solar installations for 2014-2015. Estimates reveal a total of Rs 1425 million have been funded for subsidy payements for the government buildings. As MNRE reveals, the total cost of 25 MW solar installations is Rs 4,750 million.

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Local rooftop installer, Zolt Energy’s Pradeep Palleli, said the company ahs not received the subsidy approval yet. He said, “Announcing subsidies and not releasing it in time is really a major hurdle hindering the growth of the rooftop solar industry. Customers, installers and integrators like us have been fed up with the delays for the last 8-10 months.” Now the company is “done away” with the subsidy applicatios for off-grid installations, said Palleli. Palleli has also explained that there is a trouble with those customers who have been expecting this subsidy, “even customers who can comfortably afford the investment are looking for a subsidy.”

Solar analyst, Bridge to India also said in a newsletter that the subsidy is “doing more harm than good” for the rooftop solar market in India. They produced a subsidy-free model and their calculations say that the rooftop solar market will add 47 MW in this year which ensures 66 per cent growth till 2018. An announcement from MNRE also says that the subsidy will be reviewed in every six months. A suggestion has been posted by Bridge India to the government that they “should scrap the MNRE rooftop subsidy mechanism altogether and instead use these funds for cheaper and more accessible financing for the sector or even expanding the scope of rooftop scheme.”

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