The Punjab Government has launched a draft version of its renewable energy policy, which aims to meet 21% of its power requirement through renewable energy by the year 2030.

Punjab Energy Development Agency (PEDA) will be the designated implementation agency of this policy. The policy has set a target of deploying 3,000 MW of solar projects by 2030, which will include utility-scale, canal-top, rooftop, floating, and hybrid solar projects.

Besides, the policy seeks to deploy a non-solar power generation capacity of 1,500 MW, which would include biomass, biomass and bagasse co-generation, and small hydro.

The policy also aims to develop 500 MW of biofuel projects (based on biomass as the primary feedstock). Other targets include developing storage technology for renewable energy projects, promoting the use of electric vehicles, and solar charging stations. The policy, however, does not list targets for wind power projects as the potential for wind energy is low in the state.

To boost the manufacturing of equipment used for solar generation such as cell, wafer, modules, and balance of system (BoS), the policy has provided exemption on state goods and service tax (SGST), electricity duty, stamp duty, and property tax. The policy has also announced fiscal incentives for small hydel and canal-top solar projects.

Local subsidies and incentives can be tricky. India won a WTO trade ruling against several states in the U.S. for providing subsidies to domestic solar companies.

PEDA is also expected to develop solar projects under state or central government policy on a turnkey basis. It will receive 5% facilitation charges from the concerned departments.

Lately, Punjab has started issuing various tenders to increase solar installations in the state. The state currently has one of the lowest installation capacities in the country. According to Mercom’s India Solar Project Tracker, it only has 810 MW of installed solar capacity with a negligible pipeline of projects as of Q2 2019.

Recently, in August 2019, Punjab State Power Corporation issued a tender for the short-term power purchase of 185 MW or 405 million units from renewable energy (non-solar) to meet its renewable purchase obligation.

Then in July 2019, the state transmission corporation issued a tender to set up rooftop solar projects totaling 1,699 kW on various buildings owned by it.