Jharkhand has announced the new ‘Jharkhand Solar Policy 2022’, aiming to deploy a cumulative capacity of 4 GW in the state by 2026.

The government intends to install 3 GW of utility-scale solar projects in the next five years. Solar parks are expected to constitute 700 MW, and non-solar parks 1 GW. The state also plans to commission 900 MW of floating solar projects and 400 MW of canal top solar projects.

Jharkhand aims to add 720 MW of distributed solar installations. This would include 250 MW of rooftop solar, 220 MW of captive solar, and 250 MW of solar irrigation.

The state plans to develop 280 MW of off-grid solar projects. Mini and micro grids would constitute 110 MW and solar pumps 120 MW.

The policy will be valid for five years.

The state intends to increase the share of solar electricity in its distribution companies (DISCOMs) energy purchase to 12.5% by 2023-24. Jharkhand plans to provide a deployment roadmap across various categories and applications with dedicated programs on utility solar through solar park and non-park solar installations, distributed grid-connected and rooftop solar systems, and off-grid systems.

The policy will support domestic manufacturing of solar technologies and their components and energy storage. Jharkhand targets to scale energy storage by identifying viable use cases, providing financing options, and promoting research and development activities.

Jharkhand intends to meet the policy’s objectives by land allocation and identification of suitable sites, innovative processes, business models, bidding mechanisms, and collaborations for accelerating deployment.

The state will also provide financial and non-financial incentives and create an enabling environment for developers and investors, adopting bankable power purchase agreement structures to increase investor confidence.

Private sector players will be invited to set up solar parks under the plug-and-play model to be connected to the state transmission utility network. The minimum capacity of these parks would be 20 MW. For non- park solar, the minimum capacity will be 2 MW.

Restrictions on land allocations

The maximum land area allotted to the solar power producer or solar park developer to set up solar power projects based on crystalline technology is 2 hectares/MW. With trackers, 3 hectares/MW will be allotted. The maximum land allotted for solar power projects based on thin-film or amorphous technology with or without trackers is 3.5 hectares/MW.

Subsidy

State subsidy will be available over and above the central subsidy. The subsidy will be provided to residential rooftop solar systems and grid-connected solar pumps installed under Component C of the KUSUM Program.

Up to 60% of the benchmark cost will be provided as a state subsidy for rooftop solar systems up to 3 kW if the annual income of the residential consumer is less than 300,000. For systems of sizes 3 kW to 10 kW, 80% of the benchmark cost will be provided as a state subsidy.

For grid-connected solar pumps installed under the KUSUM Program Component C, 30% of the benchmark cost will be provided as a state subsidy.

Banking charges

Banking of 100% of energy will be permitted throughout the year, based on the feasibility and prior approval of Jharkhand Bijli Vitran Nigam Limited (JBVNL). Banking charges will be exempted for grid-connected rooftop solar projects and adjusted at the rate of 5% of the energy delivered at the drawal point. The banking year will be from April to March.

Drawals from banked energy will not be permitted from April 1 to June 30 and February 1 to March 31 of each financial year. The unutilized banked energy will be considered a deemed purchase by DISCOMs at 50% of the average pooled power purchase cost. Energy settlement will be done monthly. The payment for the deemed purchase of un-utilized banked energy will be capped at 10% of the total banked energy during the applicable year.

Manufacturing incentives

To promote solar manufacturing facilities to support economic growth and the creation of jobs in the state, Jharkhand will allot government land in solar parks on a priority basis on a long-term lease agreement.

The state will waive Electricity duty for the new manufacturing facilities and ancillaries of the solar power projects for five years. The state goods and services tax (SGST) will be reimbursed to solar energy equipment manufacturers. There will also be a 100% exemption on stamp duty and 100% reimbursement of customs duty on input required for manufacturing the solar modules and battery storage for five years.

Open access solar

The policy encourages the deployment of captive and group-captive solar projects in the state. The minimum capacity requirement is 100 kW, and there will be no limit to the cumulative capacity for this category.

The cross-subsidy surcharge and additional surcharge will be exempted for the solar power projects set up for third-party sale within the state and captive solar projects through open access. Grid-connected solar power projects with storage systems selling power within the state will get a 100% exemption from transmission and wheeling charges for ten years from the project’s commissioning date.

In December 2021, in its order, the Supreme Court of India ruled that captive power consumers are not liable to pay an additional surcharge.

For intra-state, open access clearance for the whole tenure of the project or 25 years, whichever is earlier, will be granted. Without any response or intimation from the Jharkhand DISCOMS to the generator within 21 days, such application will be considered open access.

Solar Purchase Obligation (SPO)

JREDA intends to lower the minimum eligibility requirement to designate an obligated entity and define SPO targets periodically. This would contribute to creating the demand for solar in the state. The obligated entities can meet their SPO targets either through the installation of rooftop solar systems or through various market mechanisms proposed in the policy, such as open access, subscription to green tariffs, etc.

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