The Rajasthan Investment Promotion Scheme (RIPS) 2024, announced by the state government recently, offers a slew of incentives to boost investments in renewable energy, battery energy storage systems (BESS), and green hydrogen.

Renewable energy units benefit from several exemptions and reimbursements aimed at lowering their operational and setup costs:

• 100% exemption from electricity duty for seven years
• 75% exemption on stamp duty and reimbursement of the remaining 25%
• 75% exemption on conversion charges with reimbursement of the remaining 25%
• 100% reimbursement of mandi fees/market fees for seven years

Renewable energy units are eligible for a waiver on Pollution Control Board fees for obtaining Consent to Establish and Consent to Operate certifications. This helps streamline regulatory processes and reduces initial compliance costs for setting up renewable energy projects.

For renewable energy generated and consumed within the state for green hydrogen production, a 100% subsidy on cross-subsidy surcharge and additional surcharges is applicable. This incentive is valid for seven years and governed under the Integrated Clean Energy Policy of Rajasthan, facilitating the growth of green hydrogen projects by reducing costs.

Renewable energy projects can receive incentives based on their net sales turnover, providing ongoing financial support post-installation.

Transmission and Wheeling Charges

Several exemptions are offered on transmission and wheeling charges for renewable energy projects and BESS:

• Renewable energy-integrated storage projects with a capacity equal to or exceeding 5% of the renewable energy capacity receive a 75% exemption on transmission and wheeling charges for seven years. For BESS exceeding 5% capacity, additional exemptions of 1% on transmission and wheeling charges are offered for every 1% increase in storage capacity, up to 30% capacity. Beyond 30%, the projects are exempt from 100% of transmission and wheeling charges.
• Standalone BESS is 100% exempt from transmission and wheeling charges for power supplied during peak or non-solar hours, benefiting operators for seven years.
• BESS connected to the 11 kV or 33 kV grid sub-stations are also granted a 100% exemption on transmission and wheeling charges for seven years.

In addition, if a renewable energy project supplies power to a green hydrogen project within Rajasthan, 50% of the energy supplied will be exempt from transmission and wheeling charges for seven years. This provision is governed by the Integrated Clean Energy Policy of Rajasthan and is designed to promote local green hydrogen production.

Green hydrogen projects also benefit from full exemptions on cross-subsidy surcharges and additional surcharges.

Captive Renewable Power Projects

Under the program, up to 51% of the investment in captive renewable energy projects, including solar power projects, can be included in the Eligible Fixed Capital Investment (EFCI). For group captive power projects with agreements over 12 years, 100% of the investment is counted towards the EFCI, helping such projects qualify for higher capital or investment subsidies.

Captive renewable energy projects are granted a 100% exemption from banking, wheeling, and transmission charges. For “behind the meter” renewable energy projects, there is no limit on maximum generation capacity, and these projects are perpetually exempt from electricity duty, provided they do not inject power into the grid during off-peak hours.

Captive solar power projects also enjoy 100% banking rights, with no restrictions on peak-hour withdrawals.

Capital and Investment Subsidies

Renewable energy projects can avail capital subsidies based on project size, with larger projects (Mega or Ultra Mega) receiving more. Companies also benefit from a 75% State Goods and Services Tax (SGST) reimbursement for up to 7 years, significantly reducing operational costs. Additionally, turnover-linked incentives provide ongoing financial support, rewarding enterprises based on their net sales turnover after project installation.

Additional Benefits for Power-Intensive Sectors

Manufacturing companies in power-intensive sectors that utilize renewable energy receive a 5% reimbursement on state taxes or a 5%-point VAT reimbursement on natural gas for seven years.

Enterprises in power-intensive sectors also enjoy additional support, with the option to include up to 51% of their investment in captive renewable power projects in their EFCI. Companies entering group captive power agreements of 12+ years can include 100% of their investment in EFCI, making them eligible for asset creation incentives.

Flexible Land Payment Models

Renewable energy and green hydrogen projects benefit from a flexible land payment model requiring only 25% of the land cost upfront. The remaining 75% can be paid over ten years at an 8% interest rate, making land acquisition more accessible for large-scale renewable energy investments.

Earlier, Rajasthan unveiled its Renewable Energy Policy 2023, aiming to establish 90 GW of renewable energy projects by the financial year 2029-30. Solar projects will constitute 65 GW, and wind and wind-solar hybrid projects will account for 15 GW.

Rajasthan is the first state in India to achieve more than 50% solar in its total installed power capacity, according to Mercom’s India Solar Project Tracker.