(Q) - What are the policies under which a Solar PV Plant can be put in India?
Ans - Solar projects are set up mainly under three following policies in India:
- National Solar Mission (JNNSM) - Target is to set 20,000 MW by the year 2022. It has been divided under 3 phases. Phase I is completed and Phase II , Batch I is under progress. Total of 750 MW has to be installed under Phase II, Batch I by April 28th, 2015. The draft guidelines for Phase II, Batch II for 1500 MW Solar Projects have also been released by MNRE. Under this scheme the project can be put anywhere in the country at a technically feasible site.
- State Policies - the states across the country come out with their policies under reverse bidding or a fixed tariff scheme for setting up the projects. Eleven states have come out with their policies in the country so far which Includes Gujarat, Rajasthan, Punjab, U.P, A.P, M.P, Karnataka, T.N, Kerela, Odisha and Uttarakhand.
- REC Mechanism - the Renewable Energy Certificate mechanism is the other way for setting solar projects anywhere across the country. The power a generator sells gives financial returns as per two components:
- APPC (Avg. Power Purchase/Pooled/Procurement Cost) - means the weighted average pooled price at which the distribution licensee has purchased electricity in the previous year from all the long-term energy suppliers excluding the purchases based on liquid fuel. Provided that the purchases from traders, short-term purchases and purchases from renewable sources shall not be taken into account while determining Pooled Cost of Power Purchase. It ranges from Rs. 2.3 to Rs.3.38 /kWh in India state wise.
RECs can also be availed in case of third party sale of power.
- The REC Component-The price of RECs from year 2012-2017 is
Price per KWh or unit Solar REC Non Solar REC
Floor Price Rs.9.3 Rs.1.5
Forbearance Price Rs.13.4 Rs.3.3
Suppose you set a Solar PV plant and a PPA (Power Purchase Agreement) of Rs.2.5/KWh (APPC) is signed with State utility. Then you can avail a minimum total tariff of Rs.11.8 per unit (APPC+ Solar Floor Price) provided all the RECs are traded at Power Exchange. The REC price is decided via price discovery mechanism as per demand and supply by power exchanges, which trade REC on last Wednesday of every month. Further REC Info can be accessed at https://www.recregistryindia.nic.in/
How it work :
How Solar Energy works- Basic Principle
Solar Energy work 01
Solar Energy work 02