Rajasthan has unveiled its Integrated Clean Energy Policy, 2024, with an ambitious target of achieving 125,000 MW of renewable energy capacity by the financial year 2030. The plan includes installing a capacity of 90,000 MW of solar power, 25,000 MW of wind and hybrid energy, and 10,000 MW of hydro, pumped storage, and battery energy storage systems.

The policy will be in force until March 29, 2029, or until superseded.

The state’s power distribution companies (DISCOMs) will allow rooftop solar capacity addition of up to 80% of the capacity of the distribution transformer in the area.

Rooftop systems up to 1 MW capacity will be allowed under gross metering.

Virtual net metering and group net metering will be permitted for consumers who do not have sufficient space on their premises to access renewable energy.

Small wind turbines will be allowed with rooftop solar under the net metering facility.

Suitable regulations will be added to the Urban Building Byelaws to facilitate the installation of rooftop solar systems.

The maximum time for the execution of various activities related to rooftop solar systems under net metering by DISCOMs will be as follows:

Rajasthan will promote the setting up of decentralized solar power projects with a minimum capacity of 0.5 MW and a maximum capacity of 5 MW in the premises and in the vicinity of 33 kV grid sub-stations to promote the sale of power to DISCOMs. The tariff for these projects will be determined through a competitive bidding process.

Land conversion will not be required under the Rajasthan Tenancy Act 1955 and Rajasthan Land Revenue Act 1956 for developing renewable energy parks on private agricultural land.

Government land will be allocated for renewable energy projects and parks. For projects with a capacity of less than 2,000 MW, a security deposit of ₹100,000 (~$1,180)/MW will be required. For projects with a capacity of 2,000 MW or more, the deposit will consist of ₹100,000 (~$1,180)/MW (up to 2,000 MW). The amount for any additional capacity must be submitted as a bank guarantee.

The state will promote repowering existing wind turbines that have completed at least 10 years in operation.

Wind-solar power projects will be recognized as hybrid projects if the rated power capacity of one resource is at least 25% of the rated power capacity of other resources.

Project Completion Timeline

 

Incentives

Renewable energy projects are eligible for the following incentives under the Rajasthan Investment Promotion Program 2024:

Exemptions and Reimbursements

• Electricity Duty: 100% exemption from payment for seven years.
• Stamp Duty: 75% exemption and 25% reimbursement.
• Conversion Charges: 75% exemption and 25% reimbursement.
• Mandi/Market Fee: 100% reimbursement for seven years.

There will be a full waiver of Pollution Control Board fees for obtaining Consent to Establish and Consent to Operate certifications.

Anchor Booster Incentives

Enterprises availing of the anchor booster benefits are entitled to the following, provided the energy generated is exclusively for captive consumption and no third-party sale is involved:

• Banking, Wheeling, and Transmission Charges: 100% waiver or reimbursement.
• Captive Power Project Capacity: A ceiling of 200% of the connected load or contract demand.
• Banking Flexibility: 100% banking allowed with no withdrawal restrictions during peak hours.

Behind-the-Meter renewable projects

• No maximum capacity limit for renewable generation.
• Perpetual exemption from electricity duty provided no power is fed into the grid during off-peak hours.

Development and Facilitation Charges

Power projects in Rajasthan selling electricity to entities other than the state’s  DISCOMs must pay Renewable Energy Development and Facilitation Charges (REDFC) for the solar component of the project. This applies from the date of commissioning for the project’s entire lifecycle at a rate of ₹50,000 (~$590) per hectare per year for projects commissioned after the policy’s commencement.

Developers can either pay the REDFC charges or supply 7% of the power generated to Rajasthan DISCOMs free of cost by installing additional capacity. REDFC does not apply to projects supplying power directly or indirectly to Rajasthan DISCOMs or for captive consumption within the state.

Payments must be made annually by April 30 without interest or by June 30 with an interest of 9% per annum. Failure to comply by June 30 may result in actions such as recovering dues from power bills or disconnecting the project from the grid until the charges and interest are fully paid.

Energy Storage

Large hydropower projects, including pumped storage projects with a capacity exceeding 25 MW, and energy from all small hydro storage projects commissioned after March 8, 2019, will be classified as renewable energy.

Pumped storage projects will be allocated for a maximum tenure of 45 years from the date of allotment. At the end of this period, the projects will revert to the state government or may be extended for up to 30 years.

The state will encourage the development of Battery Energy Storage Systems (BESS), requiring each project to have a minimum power rating of 1 MW, an appropriate energy rating tailored to its specific application, and a single-site location with a minimum bid capacity of 1 MW. Energy supplied from standalone BESS will be classified as renewable energy.

Additionally, if 85% or more of the total energy stored annually in the BESS is sourced from renewable energy, such energy will qualify for Energy Storage Obligation recognition.

To promote storage capacity for reliable power supply, new renewable energy projects integrated with BESS must have a minimum capacity of X/2 MWh, where “X” represents the installed capacity of the renewable energy project. Such projects will receive a 50% exemption on registration charges for the renewable energy capacity. For BESS installations exceeding X/2 MWh, registration charges will be fully exempted pro-rata corresponding to the additional storage capacity installed.

To ensure adequate storage capacity, new renewable energy projects on the state transmission utility network (excluding hydro projects) with an installed capacity exceeding 5 MW—or as specified by the central government—will be required to include energy storage systems with at least two hours of storage, equivalent to a minimum of 5% of the renewable energy capacity.

Renewable energy projects integrated with storage systems that have a capacity of 5% of the renewable energy capacity will receive a 75% exemption on transmission and wheeling charges for seven years. For storage capacity exceeding 5% of the renewable energy capacity, an additional 1% exemption on transmission and wheeling charges will be granted for each 1% increase in storage capacity, up to 30%.

Projects with storage systems exceeding 30% of the renewable energy capacity will qualify for a 100% exemption on transmission and wheeling charges.

Standalone BESS will also benefit from a 100% exemption on transmission and wheeling charges for power supplied during peak or non-solar hours for seven years. Additionally, BESS connected to 11 kV or 33 kV grid substations will be fully exempted from transmission and wheeling charges.

Green Hydrogen

The state aims to produce 2,000 kilotons per annum (kTPA) of green hydrogen by 2030. This includes establishing at least one Green Hydrogen Valley to meet the demand from fertilizer plants and refineries within Rajasthan and outside.

The state targets developing at least one gigafactory for manufacturing electrolyzers, with a vision to export these domestically produced electrolyzers worldwide.

Additionally, Rajasthan seeks to contribute to at least 20% of India’s green hydrogen exports, either as fuel, chemicals derived from green Hydrogen, or technology products such as electrolyzers.

Green hydrogen generation projects, parks, and equipment manufacturing plants in Rajasthan will be eligible for benefits under the Rajasthan Investment Promotion Scheme (RIPS). Key incentives include:

Incentives for Sunrise Sector

• Green hydrogen projects can choose between the sunrise booster on asset creation incentives or the anchor booster.
• A 25% sunrise booster on asset creation incentive for the first three units.
• 5% interest subvention on term loans for investment in plant and machinery for up to five years.

Exemptions and Reimbursements

• 100% exemption from electricity duty for 7 years.
• 100% reimbursement of mandi/market fees for 7 years.
• 75% exemption and 25% stamp duty and conversion charges reimbursement.

Plants with up to 50 kTPA capacity established by March 31, 2029, will receive:

• 50% waiver on intra-state transmission and wheeling charges for power produced from solar or wind projects.
• Waiver of additional surcharges and cross-subsidy charges on energy drawn from captive solar/wind plants for green hydrogen production.

The benefits apply for seven years from the plant’s commissioning.

In October, Andhra Pradesh announced its Integrated Clean Energy Policy 2024, aiming to add over 160 GW of renewable energy capacity and attract investments worth approximately ₹10 trillion (~$118.95 billion).

Subscribe to Mercom’s real-time Regulatory Updates to stay informed about critical updates from the renewable industry.