Gujarat’s New Budget Emphasizes on the Growth of Rooftop Solar Sector

In the Gujarat state’s budget announced for the current financial year (FY) 2019-2020, a recalibrated target of 30 GW of renewable capacity by 2022 has been announced.

This target includes both solar and wind, and out of this targeted capacity, 20 GW will be specifically for the state while 10 GW will be for projects tendered by the national implementing agencies, a state official told Mercom.

The state government has renewed its focus on distributed generation solar projects in the state with the new budget having a provision of ₹10 billion (~$144.9 million) for a new rooftop solar photovoltaic (PV) program.

Under the proposed rooftop solar PV program, 200,000 families will be covered during the year and the beneficiaries will be given a subsidy of up to 40% of the capital cost for rooftop solar projects of capacity 3 kW and a subsidy of 20% on the system cost for rooftop solar projects in the range of 3 kW to 10 kW.

This will be an added incentive on the subsidy already being provided by the central government and expected to help in faster adoption of rooftop solar PV by the residential customers.

The new target will help the state entities meet their renewable purchase obligation (RPO) in the coming financial years. Gujarat has its RPO set at 14.30% for FY 2019-2020; 15.65% for FY 2020-2021 and 17% for FY 2021-2022.

This is in line with the modification of land laws for the development of wind and hybrid (wind and solar) parks in Gujarat by the state government. The land has been earmarked for wind and wind+solar hybrid projects auctioned by the Gujarat state agencies as well as the central agencies.

According to Mercom’s India Solar Project Tracker, Gujarat has an installed solar capacity of ~2.1 GW with nearly ~1.1 GW of solar projects under various stages of development.

An increasing number of states with limited land availability are opting for rooftop solar and have been allocating portions of their budget specifically for the growth of this fledgling sector. For instance, in February 2019, the Kerala state government had announced its budget, which put the impetus on setting up rooftop solar projects in the state while also pushing for the development of the electric vehicle sector.

Image credit: Council on Foreign Relations