In an effort to provide electricity to every rural household in the country the ministry of new and renewable energy has decided to provide a generation-based incentive of Rs 12 per kilo watt hour for electricity generated from solar photovoltaic and a maximum of Rs 10 per kWh for electricity generated through solar thermal power plants and fed to the grid from a grid interactive solar power plant of 1 mega watt and above.
The estimated unit cost of generating electricity from various renewable energy sources range from Rs 1.75 per kWh (small hydro power plants) to Rs 15 per kilowatt (solar photo voltaic power). The other renewable energy sources include wind power, biomass, bagasse and energy from waste.
The incentive would be extended to projects developers for a period a period of ten years. The grid interactive power plants will be set up on build own and operate model. Each state, the ministry’s paper said, would be allowed to add 10 MW aggregate capacity under the government’s scheme.
In view the high initial capital cost of solar power and the cost of electricity from such plants, the ministry has decided to provide these incentives. A paper prepared by the ministry on the scheme stated: “Photovoltaic systems have emerged as a viable power source for small applications such as lighting, water pumping and telecommunications and are being increasingly used for meeting the electrical needs in remote villages, hamlets, hospitals and households in the hilly areas, forest regions, desert and islands.”
Currently, there are 14.5 lakh photovoltaic systems in place with a cumulative capacity of 125 MWp. The largest photovoltaic plant in the country so far is about 200 kWp capacity. India receives solar energy equivalent to 5,000 trillion KWh per year. The daily average of solar energy received over different parts of the country varies from 4-7 kWh per square meter depending on the location.