GUVNL Withdraws Subsidy to Small-Scale Distributed Solar Projects

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Gujarat Ujrja Vikas Nigam Ltd. (GUVNL) issued notice informing that the solar projects to be installed under “Policy for Development of Small Scale Distributed Solar Projects -2019” dated 06.03.2019 shall not be eligible for any Subsidy.

This has affected about 4,000 projects with an aggregate capacity of around 2500 MW contracted capacity.

The Policy for Development of Small Scale Distributed Solar Power Projects was announced by the government to encourage the distributed solar projects. These projects were part of PM Narendra Modi’s ambitious renewable energy goals.

As per the policy, any eligible entity can set up a solar power plant with capacity ranging from 0.5 MW to 4.0 MW and supply the solar power produced to the nearest GETCO substation.

The purchase price of power produced was fixed at Rs 2.83 per unit which was already far lower than other states like Rajasthan and Maharashtra, where they set Power Purchase Agreements (PPA) tariff rates at higher than Rs 3.15.

It is estimated that around 100 crores are invested by MSME for registration with DISCOM/GEDA to DISCOMs PGVCL, UGVCL, DGVCL, MGVCL through advanced charges for transmission line supervision and connectivity. Also developers have invested around 1000 crore so far and a 10000 crore proposal has been received.

Now the Gujarat government is apprehensive about providing these subsidies. This will effectually revoke the state’s effort in incentivising and building a green state.

Industry body ASSOCHAM and other solar associations have also pointed out that these solar power projects will provide employment to more than 30,000 people for 25 years and withdrawing subsidies won’t help the state growing its renewables.

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