The Ministry of New and Renewable Energy (MNRE) announced a 30% subsidy to rooftop solar installations last year. The subsidy will reduce the cost of 25MW of government rooftop installations. However, many are not too excited about the subsidy, attributing it to future uncertainty.
The 30% subsidy was previously announced for installations up to 500kW in size, however owing to budgetary constraints, the cap was to 100kW. Additionally, residential solar is not included in the 25MW subsidy’s allocation.
Only those projects that have completed installation and payments in accordance with MNRE criteria are eligible for this subsidy. The subsidy is being supported by India’s National Clean Energy Fund (NCEF), which has been created by charging carbon fuel producers and is available for off-grid and decentralised solar installations for 2014-2015. This totals to INR142.5 crore (US$26.8 million) in subsidy payments for all government buildings.
Source: The Hindu
For 2014-15, the MNRE budget is US$72.0 million, a huge fall from the US$246.0 million that was allocated last year. However, due to long, complicated processes for awards, MNRE was able to disburse only US$69.0 from its US$246.0 allocation.
A number of local rooftop installers are yet to receive subsidy approvals and are losing patience in the face of growing delays. While the subsidy scheme may have noble intentions and can reduce the time taken by solar power customers to pay back the upfront costs of installations, solar rooftop installation companies often jack up the prices to account for the risks associated with delayed payments. This only means the end customers ends up receiving no real benefit from the subsidy.
Bridge to India, a solar power consultancy has been quoted as saying the subsidy is “doing more harm than good” for the Indian rooftop solar market and 25MW represents a tiny fraction of this growing industry.
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