Solar Subsidy in Up, the main aim is to promote renewable or green energy which is a clean source of energy, using photovoltaic technology to harvest sunshine and generate electricity with zero cost, enough for the use of homes and office appliances.
As India’s population increases tremendously, the need for electricity increases to meet the demand for electricity is challenging for the power industry. At present including the government, the power industry is slowly and steadily switching to solar energy and the government supporting it by providing subsidies for the installation of solar rooftops.
Let’s understand what is Solar Subsidy.
A solar subsidy is a special type of financial help that encourages more people and businesses to use solar energy. It gives benefits like lower initial costs or direct financial assistance. This helps motivate them to invest in solar power, which leads to more clean and renewable energy being used instead of fossil fuels. The goal is to speed up the switch to greener and more sustainable energy sources.
Solar subsidies are financial support programs designed to make solar power more affordable and encourage its adoption. Their goal is to reduce greenhouse gas emissions and promote sustainable energy sources. These solar subsidies play a crucial role in the growth of the solar industry and the transition to cleaner energy alternatives. It’s important to note that the availability and nature of solar subsidies can vary greatly between countries, regions, and local jurisdictions.
Criteria of Subsidy for Uttar Pradesh
India has set a goal to achieve 22,000 MW of solar power by the financial year 2026-27, and one of the key milestones is reaching a capacity of 450 GW from non-fossil fuel sources by 2030. As of 30th December 2022, India has made significant progress, with a total installed renewable energy capacity of 120,900 MW, including 63,302 MW from solar power and 41,930 MW from wind power. However, to meet the 2030 target, more than 300 GW of additional capacity needs to be added. This underscores the country’s commitment to cleaner and sustainable energy sources.
According to the National Institute of Solar Energy, Uttar Pradesh has a significant solar potential of approximately 22.83 GWp. To tap into this potential, the state introduced the UP Solar Subsidy Policy in November 2022. This Up Solar policy aims to promote and facilitate the utilization of solar energy resources strategically and efficiently.
Uttar Pradesh, the fourth-largest state in India, holds 16.2% of the country’s population. Because of this, the state’s efforts in both its climate strategy and power sector have a significant impact on national goals. The state has a total energy capacity of 29,858 MW. Out of this, 72% comes from thermal plants (coal, gas, diesel), 16% from renewable sources, 11% from hydroelectric, and 1% from nuclear. Among the renewable energy capacity of 4,727 MW, solar contributes 53% (2,485 MW), followed by bio-power at 46% (2,193 MW), while the remaining 1% comes from small hydro installations.
However, solar energy usage is currently much lower than its potential. To address this, the Uttar Pradesh Solar Subsidy of 2022 has been introduced to speed up the adoption of solar power and align with India’s ambitious solar installation targets.
Under the Uttar Pradesh Solar Policy 2023, this framework will be in effect for five years or until a new policy takes its place. The central goal of this policy is to generate 22,000 MW of solar power by the fiscal year 2026-27. To achieve this, around 14,000 MW will be added through large solar parks, and the remaining 8,000 MW through solar rooftop installations.
This objective includes installing 4,300 MW through solar rooftop projects and a significant 17,700 MW through larger solar projects. The policy also includes plans for creating solar parks, promoting solar-powered cities, encouraging solar use in agriculture, and advancing energy storage solutions.
A key aspect of this policy is the provision of incentives for solar projects on rooftops of homes, institutions, and social facilities. Homeowners can benefit from a subsidy of Rs 15,000 per kW, up to Rs 30,000 per consumer. This initiative will be managed by the Uttar Pradesh New and Renewable Energy Development Agency (UPNEDA), which oversees policy implementation.
Additionally, in collaboration with the Ministry of New and Renewable Energy (MNRE), residential users can receive extra financial support through the Rooftop Solar Programme Phase II scheme. This support can be up to Rs 18,000 per kW or 40% of the benchmark cost, whichever is lower.
The policy also provides advantages for commercial and industrial sectors, including a ten-year exemption from electricity duty, net metering, banking facilities, and relief from wheeling and transmission charges. Excess power produced from solar rooftop projects can also be sold to third parties within the state.
In terms of larger solar projects, the policy encourages their growth through competitive bidding, self-use, third-party sales, and integration with thermal power. It promotes the creation of large solar parks, each with a minimum capacity of 500 MW, across various regions of the state. The policy incentivizes these projects with benefits like exemption from stamp duty on land registration, a ten-year waiver of electricity duty, and a simplified approval process.
The policy’s vision extends to fostering solar-powered cities by providing financial and technical support for planning and executing solar projects in urban areas. Ayodhya is designated as the pilot model solar city, and 16 other cities are earmarked as potential solar cities. Furthermore, the policy aims to equip approximately 1.35 million houses with rooftop solar systems during its duration.
For agriculture, the policy envisions the conversion of separate agricultural power sources and grid-connected private tube wells to solar power, ensuring reliable and affordable energy access for farmers. Additionally, the installation of larger solar systems with four-hour battery storage is encouraged through a state subsidy of Rs 2.5 crore per MW.
In summary, the Uttar Pradesh Solar Policy 2023 is a significant step towards harnessing the state’s solar potential. It covers various sectors and offers a range of incentives and measures to achieve its ambitious solar energy targets.