New solar policy cuts power rates in Gujarat

NEW DELHI: Gujarat‘s new solar policy will reduce electricity costs by over 40% and expand the state’s potential as India’s renewable energy hub, Chief Minister Vijay Rupani said on Tuesday.

“Currently, the industry gets power at an average cost of Rs. 8 per unit. The new policy will help bring it down to Rs. 4.5 per unit,” Rupani said, speaking while unveiling his state’s new plan for solar power.

The policy will be effective from 2021 to 2025, and promises benefits to residential as well as commercial developers to set up new projects for power purchase agreements lasting up to 25 years. New projects can also be set up by individuals without any minimum capacity generation ceiling, Rupani said.

Prior to this, a developer had to find a contracted demand of at least 50% of the planned capacity. This stalled the construction of many projects, especially during the COVID-19 pandemic.

Rupani also said that distribution companies would buy any surplus power generated from projects, in order to ensure that the projects run at their full capacity at all times and prevent curtailment issues. For projects less than 4 MW, the DISCOMs will pay 20 paise per unit above the tariff discovered through competitive bidding, the new policy states.

At 11,826.48 MW, Gujarat has the third-highest renewable power generation capacity of all Indian states, data from the Central Electricity Authority (CEA) shows. The government has set a target of achieving 30,000 MW through sustainable energy sources by 2022, and is currently home to the cheapest solar project in the country at Rs. 1.99 per unit.

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