Gujarat Budget Allocates ₹9.12 Billion for Solar Rooftop, ₹1.25 Billion for KUSUM Program

It also announced a ₹10 million subsidy for residential group captive rooftop and ground-mounted solar projects


Gujarat’s Finance Minister Nitinbhai Patel presented the state budget for the financial year 2020-21, which included a ₹9.12 billion (~$127.19 million) provision for a subsidy for solar rooftop projects and a ₹1.25 billion (~$17.43 million) towards the KUSUM program.

Of the ₹1.25 billion allocated to the Kisan Urja Suraksha Evan Utthan Mahabhiyan (KUSUM) program, ₹250 million (~$3.49 million) has been allotted to help the Gujarat Urja Vikas Nigam Limited (GUVNL) implement component-C of the program.

The MNRE launched the guidelines for the PM KUSUM program with the following components:

  • Component A: Set up 10 GW of decentralized ground-mounted grid-connected solar projects of individual project size up to 2 MW
  • Component B: Install 1.75 million standalone solar-powered agriculture pumps of individual capacity up to 7.5 HP
  • Component C: Solarize 1 million grid-connected agriculture pumps of individual capacity up to 7.5 HP

The remaining ₹1 billion (~$13.95 million) was set aside to help the GUVNL in the solarization of grid-connected agricultural pumps under component-B of the KUSUM program.

For both the components, central financial assistance (CFA) of 30% of the benchmark cost or the tender cost, whichever is lower, will be provided. The state government will give financial support of 30%, and the remaining 40% will be provided by the farmer. Bank finance will be made available for 30% of the farmer’s contribution, so that farmer initially pays only 10% of the cost.

Overall, the state provisioned allotted ₹2.276 billion (~$31.74 million) for the new and renewable energy sector. Of this, ₹956.1 million (~$13.34 million) for renewable energy and rural applications, while it allotted ₹10 million (~$139,462), was allotted towards renewable energy for urban, industrial and commercial applications.

Supporting programs were allocated ₹50 million ($697,311). This included the establishment of electric vehicle (EV) charging points to promote electric mobility in the state. Also, the public sector and other undertakings are set to receive assistance to the tune of ₹1.26 billion (~$17.57 million).

The state government also announced a ₹10 million (~$139,462) subsidy for the development of group-captive rooftop and ground-mounted solar photovoltaic projects for residential consumers.

The Gujarat Energy Transmission Corporation Limited received an allotment of ₹2 billion (~$27.89 million). The budget contributed ₹200 million (~$2.78 million) to the Gujarat Power Corporation Limited towards the establishment of a solar park in the state.

Besides this, ₹795.8 million (~$11.09 million) was set aside for grid-connected solar microgrids for agricultural pump sets.

₹150.3 million (~$2.09 million) was set aside to help the Modhera Sun Temple and town project to set up a solar project. The state also allotted ₹3.6 million (~$50,206) to help install solar projects at six government colleges in non-tribal areas, and ₹2.4 million (~$33,470) for four such colleges in tribal areas. The Gandhinagar Solar City Program was allotted assistance of ₹10 million (~$139,462).

Gujarat Budget 2020-21 Proposed Allocation of Fund

According to Mercom’s India Solar Project Tracker, GUVNL had auctioned ~2.4 GW of solar projects under (Phase I to Phase VII). Out of this, Phase I – 500 MW is operational. Gujarat has so far installed approximately 2.35 GW of large-scale solar installations while 1.94 GW of projects is currently in the pipeline.

Gujarat’s rooftop installations also account for 17.5% of the total rooftop solar installations in India as of Q4 2019. It is the top state in terms of rooftop installations, with over 400 MW installed.

Gujarat is considered one of the best states for solar largely due to high DISCOM ratings and their ability to pay on time.

Last year, Mercom reported that in Gujarat state’s budget for 2019-2020, a recalibrated target of 30 GW of renewable capacity by 2022 was announced. This target included both solar and wind, and out of this targeted capacity, 20 GW will be specifically for the state while 10 GW will be for projects tendered by the national implementing agencies, a state official had then told Mercom.