The Ministry of New and Renewable Energy (MNRE) has amended the payment guidelines for the Central Financial Assistance (CFA) received by the state/central transmission utilities (STU/CTU) involved in the development of power evacuation infrastructure for solar parks.

The Solar Energy Corporation of India (SECI) makes these payments to the concerned STU/CTU.

According to the amended guidelines, the MNRE has now split the payment to be received by the STU/CTU into three installments. Earlier, it was just a two-part payment process under which 50 percent of the CFA was paid by SECI after the award of the work and the remaining 50 percent was paid after the completion of the assigned work.

Under the MNRE amendment, SECI will now pay 50 percent of CFA after the awarding of the work, 20 percent of the CFA upon the receipt of material at site and inspection by SECI officials, and the remaining 30 percent upon the successful completion of work.

The new guidelines will help remove some burden off the shoulders of STUs and CTUs which are involved in the development of solar park evacuation infrastructure across the country.

Huge capital is tied up for such massive infrastructure development and the proposed amendments will prove to be a substantial help in the reduction of incurred costs.

In March 2017, Mercom had reported that the government would provide ₹0.8 million (~$0.012 million)/MW to central or state transmission utilities to develop the external transmission system for country’s solar parks.

The government has doubled up and increased the proposed solar park capacity from 20 GW to 40 GW and is providing financial support to the tune of ₹81 billion (~$1.23 billion) in CFA and ₹ 6.5 billion (~$100 million) from the World Bank. Now, there’s both the market opportunity as well as a more appreciative payment system for the development of solar in the country.

Image credit: By Phoenix Solar AG (Own work) [CC BY-SA 4.0], via Wikimedia Commons