Madhya Pradesh has released its “Renewable Energy Policy for Decentralized Renewable Energy Systems, 2016” after receiving cabinet approval in Bhopal on Friday, September 23. The policy is expected to drive the growth of the rooftop solar segment in the state.

Of the total of 40 GW of rooftop solar goal set by the Ministry of New and Renewable Energy (MNRE), Madhya Pradesh has allotted an installation target of 2.2 GW of rooftop solar by 2022. According to Mercom’s India Solar Project Tracker, cumulative solar installations in the state come to 867 MW to date.

According to the policy document, renewable energy systems installed under this policy will not be considered “construction” and therefore, “would not attract any additional liability of property tax for installation of [renewable energy] systems on their rooftops or premises.” Under the Madhya Pradesh Value Added Tax (VAT) (Amendment) Act, 2009, the equipment purchased for installation or repairs of renewable energy systems will be exempt from the VAT and entry tax.

Mercom’s sources at Madhya Pradesh Urja Vikas Nigam Ltd. (MPUVNL) stated that the state government will provide a 30 percent subsidy to users installing on their own rooftops or land. Installations on government buildings are expected to get a subsidy of 45 to 50 percent. They also added that with three cities in the state being selected for development as smart cities, there will be several off-takers for the solar rooftop systems as smart cities need to use solar energy to satisfy at least 10 percent of their total power consumption in the initial stage.

Formal notification of the policy is expected by September 29, 2016.