Telangana has finalized its renewable energy policy for 2025, planning to add 20,000 MW of renewable energy and storage capacity additions by 2030. The policy will be valid until 2035.

The state had recently issued a draft version of the policy.

The state targets installing 30.54 GW of renewable energy from solar, wind, energy storage, and distributed sources by FY 2030 and 47.06 GW by FY 2035.

The state also plans to install 6,000 electric vehicle charging stations (EVCS) by FY 2030 and 12,000 EVCS by FY 2035.

Telangana aims to generate 418 KTPA of green hydrogen by FY 2030 and 554 KTPA by FY 2035.

The new policy covers solar, wind, pumped storage, battery energy storage system, hybrid including firm and dispatchable renewable energy, and renewable round-the-clock projects. It also covers EVCS, including battery swapping facilities, and green hydrogen and its derivatives.

Telangana Power Generation Corporation/ Telangana Renewable Energy Development Corporation (TGGENCO/TGREDCO) will act as nodal agencies.

They will register the projects, allocate capacity, allot government land, approve power evacuation projects and allocate bays and other related facilities, invite tenders for renewable energy projects, facilitate clearances/approvals through the TG-iPASS portal or any other single window clearance facility, allocate water body for floating solar and pumped storage projects, and coordinate with the Ministry of New and Renewable Energy, and state and central agencies.

The nodal agencies will also help the developers receive project grants from the central government.

The state will set up an incubation center in distribution companies for innovation in the renewable energy sector and allocate ₹500 million (~$5.78 million) in incubation funds to support startups.

The policy added the following updates for renewable projects:

Grid-Scale Solar Projects

Developers of open access, captive, or group-captive projects must sign an agreement with the nodal agency within two months of capacity allocation and must complete them within two years of allocation.

Floating Solar Projects

• The nodal agency and irrigation department will identify suitable reservoirs.
• State/central PSUs or their joint ventures can apply as developers.
• If power is not sold to DISCOMs, developers must pay a one-time lease of ₹100,000 (~$1,157)/acre for 25 years from commissioning.

Decentralized Solar Projects

DISCOMs will purchase power from 500 kW to 2 MW projects set up by women’s groups, farmers, cooperatives, and other eligible organizations at tariffs set by the Telangana Commission.

Incentives for Solar Projects

Developers can obtain multiple incentives, including deemed non-agricultural status for project lands, exemption from the Land Ceiling Act for projects below certain capacities, reduction in water charges, land and electricity duty exemption in specific cases, and exemption from obtaining pollution control board clearances.

Additional Incentives

• A 100% reimbursement on State Goods and Service Tax (SGST) on fixed capital investment (FCI) for specific categories of decentralized grid-connected project developers and 50% reimbursement for other solar projects.
• A capital subsidy of 25% of the FCI, capped at ₹300 million (~$3.46 million) per manufacturing plant, will be provided, including captive generating projects and captive mines. The subsidy will be disbursed over five years from the plant’s commercial production date.
• Rooftop projects in households, houses under the Indiramma Indlu program, government educational institutions, and other government buildings will receive 100% net SGST reimbursement.

Wind Power

Developers of open access, captive, or group captive projects must sign a project agreement with the nodal agency within two months of capacity allocation.

The state government will replace old wind turbines with advanced models.

If DISCOMs purchase power through power purchase agreements (PPA), they will pay for the average power generated over the past three years, regardless of the wind turbine upgrades.

DISCOMs can procure additional power or sell it as captive, group captive, or third-party sales. Developers will be responsible for the power evacuation at TGTRANSCO/TGDISCOMS interconnection points.

Projects must be commissioned within three years.

Incentives for Wind Projects

Wind power and manufacturing projects will be eligible for the same incentives as solar power projects.

Additional incentives

• 25% reimbursement of up to ₹500,000 (~$5,782.6) for specific products.
• A 50% reimbursement of exhibition expenses up to ₹500,000 (~$5,782.6).
• A 10% investment subsidy of up to ₹1 million (~$11,601.77) for women promoter-led medium and small enterprises (MSEs).

Pumped Storage Projects (PSP)

Nodal agencies will issue tenders for PSP site allocation, allowing PSP development by state/central PSUs or their joint ventures.

The state can refuse up to 80% of capacity for third-party or captive projects and 20% for co-located captive projects.

Government land will be leased for 45 years, with PSPs transferred to the state after this period.

Developers must sign a project agreement within two months of allocation. PPAs will govern the deadlines for DISCOM projects, and the deadline for private projects will be six years.

Incentives for PSPs

PSP projects are eligible for the same incentives as solar power projects. They will also be exempt from contributing to the local area development fund.

The incentives for PSPs selling power to DISCOMs will be as follows:

• Reimbursement of supervision charges levied by TRANSCO/ TGDISCOM
• 50% net SGST reimbursement for FCI on the project
• Water cess is reimbursed on the net entry of water into storage sites, not for recycling water between storage sites.

Battery Energy Storage Systems (BESS)

The projects must be commissioned within one year of project allocation.

BESS projects are eligible for the same incentives as solar power projects.

TGTRANSCO and TGDISCOMS will identify land near extra high voltage and distribution substations for installing BESS projects.

Incentives for Projects Selling Power to DISCOMs

• Reimbursement of supervision charges levied by TGTRANSCO/TGDISCOMs
• 50% net SGST reimbursement on FCI incurred for the project

Battery manufacturing plants will be eligible for the same incentives as solar manufacturing plants.

They will be eligible for an annual capital subsidy of 20% on fixed capital investment for five years. The subsidy is capped at ₹300 million (~$3.46 million) per manufacturing plant until the cumulative capacity reaches 5,000 MWh.

Battery recycling projects will be incentivized to mine compounds from used batteries.

Other incentives will be the same as those for wind power projects.

Hybrid projects

The state will encourage wind, solar, and floating solar hybrid projects to optimize infrastructure use. It will also promote storage and convert vanilla power projects into hybrid projects.

Additional transmission capacity charges will not be imposed on repurposing existing projects if the transmission connectivity granted is being used.

Electric Vehicle Charging Stations

Nodal agencies will develop EVCS through state PSUs or private partnerships. Low-tension electric vehicles (LT-EVs) will not have fixed charges.

Developers will be offered designated sites for EVCS at a minimum of ₹1 (~$0.0115)/kWh, along with project management fees.

EVCS, including units with battery swapping, will be encouraged to adopt solar and green energy. Buildings with 5,000 sqm or more and parking spaces must install charging stations.

Incentives for Green Hydrogen

• A 30% capital subsidy, capped at ₹10 million (~$ 115,652)/ MW or ₹10 million (~$ 115,652)/1,400 tonnes per annum on electrolyzer stack project and equipment costs. It will be disbursed over five years and further capped at ₹300 million (~$3.46 million) per project.
• A 30% capital subsidy for project and equipment costs, including electrolyzer stack for integrated production facilities of green hydrogen, green ammonia, and green methanol. The subsidy is capped at ₹18.5 million (213,956) KTPA for green ammonia production units and ₹22.5 million (~$260,217)/KTPA for green methanol production units. it will be disbursed over five years and capped at ₹300 million (~$3.46 million)/project.

These subsidies can be availed by aviation fuel developed from green hydrogen and its derivatives.

Other incentives include non-agricultural land status, 100% SGST, stamp duty, intra-state transmission charge reimbursements, and five-year reimbursements for industrial water and cross-subsidy surcharges.

Developers will also receive ₹3 (~$0.0347)/kWh power tariff reimbursement for 20 years, support with clearances, and additional cost waivers.

Hydrogen Refuelling Stations

• A 30% capital subsidy capped at ₹300 million (~$3.46 million) per station on fixed capital investment for hydrogen refueling projects for the first 10 units over five years.
• A 100% net SGST reimbursement on purchasing machinery for refueling stations for five years.
• A 25% capital subsidy capped at ₹300 million (~$3.46 million) per manufacturing plant on FCI for producing electrolyzers and hydrogen fuel cells over five years. The plants must have a minimum of 500 MW of electrolyzer production per annum to avail of the subsidy. The subsidy will apply to the first five plants until the cumulative capacity reaches 3,000 MW.
• A 100% reimbursement of net SGST on project sales for seven years, limited to investment in plant and machinery.
• Provision of deemed non-agricultural status.
• A 100% electricity waiver for five years.
• Reimbursement of 25% of charges for delivery of industrial water for the first 10 years.
• Reimbursement of electricity tariff of ₹1 (~$0.0115)/kWh for five years.
• Reimbursement of expenses incurred for patent filing and quality certification.

Additional incentives for wind power projects are also applicable for hydrogen refueling stations.

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