Gujarat Solar Power Policy, 2021: State’s new solar power policy removes capacity ceiling for setting up plant

Chief Minister Vijay Rupani announced Tuesday the Gujarat Solar Power Policy, 2021, for the next five years that aims to reduce the power costs of industrial units by around 50 per cent while removing any capacity ceiling for setting up a solar project in Gujarat. The policy also allows consumers to give their roof or premises on lease to a third party for generation and consumption of power on same premises.

“As a result of this new solar power policy, increase in consumption and production of solar energy in the state will bring down production cost for the industries and also intends to help ‘Made in Gujarat’ brand increase its presence in the global market,” the CM said. He made the announcement at a press conference in Gandhinagar in the presence of state Energy Minister Saurabh Patel and principal secretary (Energy & Petrochemicals) Sunaina Tomar.

Rupani said the current power cost of industries, Rs 8 per unit, is likely to be halved owing to the latest policy which will help them to compete in the global market.

Apart from lifting the cap on the size of solar project and allowing consumers to give their roof or premises on lease, the policy also provides a group of consumers to set up solar projects for self-consumption as a collective ownership project and allows them to consume the generated energy in the ratio of their ownership.

Earlier, the cap on the solar project was 50 per cent of the sanctioned load or contracted demand.

Also, the security deposit, to be submitted by a developer to a power distribution company (DISCOM), has been reduced from Rs 25 lakh per MW to Rs 5 lakh per MW.

To encourage small-scale solar projects (up to 4 MW), power DISCOMs, under the new policy, will now purchase power from those projects at 20 paise per unit tariff higher than tariff discovered through competitive bidding.

Under the policy, surplus power will be purchased by the state government after set off against consumption of the project proprietor. For residential consumers and MSMEs, the state will purchase the surplus power at Rs 2.25 per unit for initial five years and at 75 per cent of latest tariff discovered and contracted by Gujarat Urja Vikas Nigam Limited (GUVNL) through competitive bidding process for non-park-based solar projects in preceding six months which shall remain fixed for remaining life of the project.

For other consumers, the surplus power will be purchased at 75 per cent of latest tariff discovered and contracted by GUVNL through competitive bidding process for non-park-based solar projects in preceding six months which shall remain fixed for the project life of 25 years.

The policy estimates savings to residential consumers in the range of Rs 1.77 – Rs 3.78 per unit, industrial and commercial (captive) in the range of Rs 2.92 – Rs 4.32 per unit and industrial and commercial (third-party sale) in the range of Rs 0.91 – Rs 2.30 per unit.

Gujarat Energy Minister said people and small industries have provided an overwhelming response to the state government’s initiatives in generating green and renewable energy. Patel said the state government has received bids for 2300 MW from residential, small industrial and institutional power producers having capacity between 500 KW and 4 MW at the rate of Rs 2.83 per unit. The contracts are likely to be awarded after January 2 as per requirement.

He added all the subsidies which were available for solar power projects in the state will be continued.

Terming the latest solar policy as “historic”, Patel also said that it has removed all restrictions for generation of solar power in the state. He added that because of this policy, the common people of Gujarat will witness gradual reduction in rates of power.

The CM said that Gujarat has already achieved 11,000 MW of production capacity and now has set a target of producing 30,000 MW of green energy by 2022, which will largely include wind and solar energy.