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Our Bureau

New Delhi, Jan. 2 The Centre plans to offer financial sops for the running of solar power units to enable developers to overcome high initial costs and ensure electricity generated by these units become cost competitive for injection into the grid.

“We will provide financial assistance amounting to Rs 12 per unit to developers in case of solar photovoltaic and Rs 10 per kilowatt hour in the case of solar thermal power fed to the electricity grid under a demonstration programme,” the Minister for New and Renewable Energy, Mr Vilas Muttemwar, said here on Wednesday.

Addressing a press conference, Mr Muttemwar said the private sector is expected to invest about Rs 1,000 crore in solar plants eligible for assistance under the scheme during the current Plan period. The demonstration programme would be limited to a total installed capacity of 50 MW of solar power during the Eleventh Plan. A maximum capacity of 10 MW in each of the country’s States and a maximum of five MW per developer will be considered under the scheme.

“To generate each unit of solar power, it costs around Rs 15 and the cost per MW comes to around Rs 20 crore. But with the announced incentives, more people would be interested,” he said.

Developers would sell electricity to state-run utilities and the incentives will be paid to them based on the tariff the utilities provide. Project developers will be given the incentive at a fixed rate for a period of 10 years and these incentives would be over and above any financial assistance extended by States. “Due to the incentive, the volumes are likely to go up, which would further bring down the cost,” Mr Muttemwar added.

Currently, renewable energy accounts for about 7.5 per cent of the country’s installed generation capacity of 1,27,673 MW, with most of it coming from wind energy projects. The share of solar power in renewables is small and only 2 MW of grid interactive solar power is generated in the country.

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Govt plans financial sops for solar power units

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