The Government of India has sanctioned Rs 228 crore to subsidise solar photovoltaic projects built on tops and banks of water canals. Through this grant, the government hopes to help creation of 50 MW of canal top and 50 MW of canal bank solar projects.

Canal-top solar plants have caught the fancy of people ever since American solar major, SunEdison, put the country’s first such plant, of 1 MW capacity on the Narmada canal in Gujarat in 2012 (pictured here). More recently, the Hyderabad-based Megha Engineering built a 10 MW plant again on another branch of the Narmada canal system, near the city of Vadodara.

The Ministry of New and Renewable Energy has assumed a total cost of Rs 975 crore for the 100 MW it wants to help develop – or, Rs 9.75 crore a MW, compared with Rs 11 crore a MW of the 10 MW that Megha Engineering built.

Under the scheme, the government offers Rs 3 crore per MW or 30 per cent of the project cost, whichever lower, for canal-top projects, and Rs 1.5 crore a MW or 30 per cent of the project cost for canal bank projects, says ‘Guidelines for pilot-cum-demonstration project for grid-connected solar PV plants on canal tops and banks’.

The idea is to encourage state power utilities or any other state government organisations or undertakings either on their own or through private sector developers. Central public sector undertakings that operate in the power sector, or have their own canal systems could also apply for the subsidy.

Canal top solar projects come with some significant advantages. First, they are quick to build-SunEdison took four months to build a MW. They prevent evaporation of water, roughly 7 million tonnes a year under the shade of one MW. They waters keep the solar panels cool, which is good for power generation.