The Ministry of New and Renewable Energy (MNRE) has extended the timeline for the ‘Development of Solar Parks and Ultra Mega Solar Power Projects’ program to March 31, 2026 (FY 2026) from the earlier FY 2024.

The extended timeline does not involve any financial implications.

It comes at a time when the development of the solar power park has been very sluggish, with only nine out of 57 approved solar parks completed as of February 2023 and an additional eight partially set up with a cumulative capacity of 10,117 MW.

Implemented first in December 2014, the program was rolled out with the objective of setting up at least 25 solar parks and ultra mega solar power projects with 20 GW capacity within five years starting FY 2014-15.

The capacity under the program was increased to 40 GW in March 2017, with parks proposed to be set up by FY 2023-24.

The program requires the solar parks to be 500 MW and above capacity, and smaller parks are considered only where there is an acute shortage of non-agricultural or contiguous land.

The program was implemented to support the accelerated installation of grid-connected solar power projects for electricity generation on a large scale. Solar parks were attractive as they addressed the challenges of land availability and acquisition. The legal issues and other variables are limited in solar parks, making it an economically feasible option for developers.

Central Financial Assistance under the Solar Park Program

The central financial assistance under the program remains unchanged. All the States and Union Territories are eligible for benefits under the program.

The solar parks are to be developed in collaboration with the state governments and their agencies, central public sector undertakings, and private entrepreneurs. The implementing agency is termed a Solar Power Park Developer (SPPD).

Under the program, the Ministry will provide Central Financial Assistance (CFA) of up to ₹2.5 million (~$30,472) per solar park to prepare a detailed project report, ₹2 million (~$24,377)/MW or 30% of the project cost, including grid-connectivity cost, whichever is lower.

If the Solar Corporation of India (SECI) were to act as the SPPD, it would receive ₹2 million (~$24,377)/MW or 30% of the project cost for external transmission infrastructure only.

In cases where CPSU/state PSU/ government organizations or their subsidiaries and joint ventures act as SPPD, they would receive ₹2 million (~$24,377)/MW or 30% of the project cost for internal infrastructure only.

In cases where SECI/CPSU/state PSU/government organizations or their subsidiaries and joint ventures act as the designated nodal agency for the implementation of solar parks and ultra mega solar power projects, ₹1.2 million (~$14,626)/MW or 30% of the project cost would be granted as a CFA to the SPPD for the development of internal infrastructure.

Further, ₹800,000 (~$9.750)/MW or 30% of the project cost would be granted to the Central Transmission Utility/State Transmission Utility for developing the external transmission infrastructure.

Private entrepreneurs undertaking solar park projects are not eligible for CFA under the program.

In August 2022, the Parliamentary Standing Committee on Energy expressed disappointment at the country’s slow progress in development and the shortfall in meeting the target set for solar parks.

In May this year, the Gujarat State Electricity Corporation invited bids to appoint a consultant to prepare a feasibility report and detailed project report to set up a 1,500 MW floating solar park in the Tapi district.