According to reports, power-starved Uttar Pradesh is eyeing greater private investment in solar energy sector to tide over persistent electricity crisis in the state.
Energy deficit is the biggest impediment for rapid industrialisation in UP and has been a major cause of flight of industry to neighbouring states.
Realising that mere thermal power projects would not be able to meet rising energy demand, both in industrial and domestic feeders, the state cabinet today approved amendment in UP Solar Energy Policy 2013 making it more lucrative and investor-friendly.
The decision paves way for setting up small solar energy projects of 1 megawatt (mw) in the private sector with government incentive.
The bidding process for solar power projects of up to 5 mw and bigger than 5 mw would be commissioned separately.
Besides, the government would incur all costs in wheeling in such power to grid and construction of sub-stations for projects in the arid Bundelkhand or backward Purvanchal regions.
State power utility UP Power Corporation Limited (UPPCL) would sign power purchase agreement (PPA) with such projects for 12 years. The government would incur the difference between weighted average tariff and levelised tariff calculated in the course of bidding.
However, the incentives would be provided only to viable solar energy projects. Captive solar power projects and projects selling energy to third party buyers would not be eligible for such incentives.
The state would provide budgetary support for difference in tariff between case I bidding tariff of UPPCL and solar power tariff for the first 500 mw solar power plants commissioned in the state, for which PPA had been signed.
By 2017, UP is aiming to augment solar energy generation by 500 Mw. Pan India, the Centre is eyeing 22,000 Mw of solar energy in 10 years. Currently, solar energy accounts for about 2,000 Mw of grid power.