The policy creates a 10‑year electricity duty exemption for sale of electricity from solar projects in the state

Uttar Pradesh’s cabinet of ministers have approved the state’s Draft Solar Policy 2017 and given it a retroactive effective date of November 6, 2017. The policy will remain in place for five years or until a new policy is created.

Click here for ‘Uttar Pradesh Solar Power Policy – 2017’

The policy can hopefully bring some respite to solar project developers in Uttar Pradesh who have recently been rocked by tariff renegotiations. The solar parks in the state also do not have a good reputation due to inadequate infrastructure.

The new policy has several goals: It aims to encourage private sector participation in Uttar Pradesh’s solar sector, provide solar power project investment opportunities, provide environmentally friendly and affordable power for all, and help to achieve the state’s eight percent solar renewable purchase obligation target by 2022.

The Government of Uttar Pradesh has set a target of 10,700 MW for solar power, including 4,300 MW from rooftop solar projects, by FY 2022. As of October 2017, Uttar Pradesh had over 600 MW of large-scale solar installations and a development pipeline of around 350 MW, according to Mercom’s India Solar Project Tracker.

Uttar Pradesh’s policy applies to utility scale, grid-connected solar power projects that are based on photovoltaic (PV) and solar thermal technologies, as well as rooftop solar projects and other off-grid applications.

Key Highlights of the Solar Policy

• The state government will promote the development of integrated solar parks that use waste lands.
• The state will help public and private sector entities develop solar parks with a minimum capacity of 100 MW each.
• The state will ensure the connectivity of solar parks to the nearest transmission substation, the land-on-lease or right-to-use basis for the development of each solar park, and provide support to strengthen the grid network.
• The minimum project size is 5 MW for standalone projects at a single location and projects will be only awarded through competitive bidding.
• The state government will bear one-third of the construction cost for transmission lines, with a maximum transmission line length of 15 km for solar projects in the Bundelkhand and Purvanchal regions. The transmission lines should be set up by the state transmission utility (STU) or distribution licensee.
• The intrastate sale of solar power to any third party will be exempt from wheeling charges/transmission charges.
• The interstate sale of solar power will be exempt from cross-subsidy surcharges as well as wheeling and transmission charges inside the state.
• The metering of power sales will be performed at the STU/Distribution licensee substation.
• To promote the large-scale installation of grid-connected rooftop systems with net-metering in private residential sectors, the state government will provide a subsidy of ₹10,000 (~$155)/kW up to a maximum of ₹20,000 (~$310)/kW per consumer on a first come, first serve basis for the first 100 MW of online applications submitted to the Uttar Pradesh New and Renewable Energy Development Agency (UPNEDA).
• The nodal agency will undertake a single window clearance for all solar power producers.
• Each financial year, the banking of 100 percent of energy will be permitted, subject to verification by the officials of the concerned state power distribution company.
• For 10 years, there will be an electricity duty exemption for the sale of electricity to a distribution licensee, captive consumption, and for third-party sale with respect to all solar projects set up within the state.
• To resolve policy implementation bottlenecks and other interdepartmental issues that may arise, an empowered committee will be constituted under the chairmanship of the chief secretary of the state.

Approval of the plan by Uttar Pradesh’s cabinet of ministers comes six months after UPNEDA first issued its Draft Solar Power Policy 2017 in June 2017. An UPNEDA official told Mercom, “The government is invested in the best interests of the stakeholders involved and the citizens residing in Uttar Pradesh. The Solar Policy 2017 reflects this.”

Image credit: By TrickyH (Own work) [CC BY-SA 4.0], via Wikimedia Commons