Haryana Releases Draft Solar Power Policy, Invites Suggestions
Solar manufacturing units will be provided 10% exemption on total applicable tax
The New and Renewable Energy Department, Haryana, has issued the draft ‘Haryana Solar Power Policy, 2021,’ and requested government stakeholders to send their comments within 15 days from the date of the notification on April 22, 2021.
The new policy will supersede the Haryana Solar Power Policy, 2016.
The draft notification identifies Haryana as an agrarian state with several geographical constraints such as high cost and paucity of barren land within its borders, with low potential for wind or hydropower. It adds that the state must focus mainly on rooftop solar projects and small-scale distributed solar systems besides exploring the potential of megawatt-scale solar projects and parks.
The notification adds that efforts are being made to promote the usage of solar energy with suitable incentives and policy frameworks for the agriculture sector and the solarization of electrical vehicle (EV) charging stations.
The solar power systems installed and commissioned during the operative period will be eligible for the benefits and incentives declared under this policy, for 25 years from their date of commissioning or for the life span, whichever is earlier, until otherwise notified by the state government.
Only new plants and machinery will be eligible for installation under this policy. In the case of solar thermal power projects, fossil fuel beyond the ceiling allowed under the Ministry of New and Renewable Energy (MNRE) will not be used. No fossil fuel will be allowed.
Renewable Purchase Obligation
The capacity installation targets for the distribution companies (DISCOMs) will be based on the Renewable Power Purchase Obligation (RPO) defined by Haryana Electricity Regulatory Commission (HERC) from time to time. To achieve the solar RPO, the government plans to install large-scale solar projects by the Haryana Power Generation Corporation on its land or government land or solar parks. Solar installations on canal top, canal banks, waterworks and reservoirs, rooftop solar systems under net metering, and gross metering on government buildings, among others.
The regulators have to estimate the entire cost incurred towards purchasing solar power in the Annual recurring revenue (ARR) order issued from time to time. Consumers will be allowed to set up projects to fulfill their RPO regardless of their contract demand.
Projects for sale of power to the DISCOMs below 2 MW
DISCOMs may procure power from distributed solar projects up to 2 MW capacity, at pre-fixed levelized tariff as determined by HERC, subject to the spare capacity available at the nearest substation. As per the RPO, 20% of the targeted solar power purchased by DISCOMs will be reserved for such small generators below 2 MW capacity.
Individuals and micro, small & medium enterprises (MSME) with land will be allowed to sell power from only one such project with a maximum of 2 MW capacity to the DISCOMs.
Large-scale solar projects for captive/third-party sale
The state will also provide transmission and banking facilities for setting up solar projects for captive consumption or third-party sale within Haryana. For third-party sale outside the state, the transmission facility will be provided under open access by the state power utilities, while banking facility may be provided by the state in which power is being consumed as per their regulations.
Any industrial or commercial unit in the state will be allowed to consume 90% of its annual consumption from the solar project.
Panchayat land on lease or rent
The state government may facilitate the lease or sub-lease of panchayat land at reasonable rates through any government agency or directly through the panchayat for setting up solar projects for a minimum period of 30 years.
Land Ceiling Act for setting up solar projects
The land area where solar projects are set up will be out of the scope of the Land Ceiling Act of the government.
Preference to solar projects with storage
Ground-mounted solar project installation with storage will be promoted and given preference in granting approvals. The preference will also be given in the tariff if purchased by the Haryana Power Purchase Centre (HPPC). The state will also promote solar projects with storage systems for captive use and third-party sale.
Rooftop grid-connected solar projects
Installation of rooftop solar systems of capacities in the range of 1 kW to 2 MW at industries, public and private institutes, schools, colleges, commercial and social institutions, charitable trust buildings, hospitals, and residential buildings will be promoted for their captive use with or without net metering facility as per the HERC Regulations. The rooftop solar systems may be installed either on CAPEX mode or the RESCO model.
Virtual Net Metering
Virtual Net Metering (VNM), including Group Virtual Net Metering, may be promoted in the urban areas. These would be encouraged, and eligible consumers would be facilitated, especially those located in the urban centers of Haryana who have constraints like access to adequate rooftop areas or inaccessible rooftops.
With virtual net metering, consumers can own a part of a collectively-owned solar power generating system. All energy produced by such a solar system will be fed into the grid through an energy meter, and the exported energy, as recorded by that meter, will be credited to the electricity bill of each participating consumer based on beneficial ownership.
Power evacuation facility
All expenses for power evacuation, transmission, distribution, and synchronizing equipment required for installation will be as per the orders of the HERC on renewable energy.
DISCOMs will bear the cost of extra-high voltage and high voltage transmission lines up to 10 km. If the distance between the interconnection point and point of grid connectivity is more than 10 km, then the cost of the transmission line for the distance beyond the 10 km will be borne equally between the project developers and the licensee, only if the power is to be supplied to DISCOMs under approved power purchase agreements.
Banking facility will be allowed for captive and third-party solar generation projects for six months from the date of power banked by the licensee, and the developer will pay the difference of unscheduled interchange charges at the time of injection and at the time of withdrawal.
The banking facility will be allowed for the grid-connected rooftop solar systems to be installed for captive use and third-party sale on the same lines as ground-mounted solar projects.
A 10% tax exemption on total applicable tax will be provided by the Industry & Commerce Department, Haryana, for setting up manufacturing units of devices and equipment related to solar power, for a limited period. Land for setting up such units will be allotted on priority.
Solar Energy-Based EV-Charging Stations
New & Renewable Energy Department will implement the program per MNRE guidelines and invite the bids. The grid connection to the EV-charging stations will be provided by the DISCOMs. The total power produced will be counted towards the solar RPO of the DISCOMs.
The DISCOMs and Haryana Power Purchase Centre (HPPC) will get a separate tariff category approval from HERC, for drawl of additional power from the grid by such charging stations, apart from generating solar power. Per unit charges to be levied for charging of EVs will not be more than ₹5 (~$0.068)/kWh in addition to per unit charges of DISCOMs.
Exemption of wheeling, transmission, cross-subsidy charges, and additional surcharges
Wheeling and Transmission Charges will be exempted for all captive solar projects which have already been approved, in March 2019, by HAREDA.
The cross-subsidy surcharges and additional surcharges are not applicable for captive solar projects.
In case projects are set up for third-party sale, cross-subsidy surcharge and additional surcharge will be similar to normal open access consumers as determined by HERC from time to time.
The notice also says that the state will promote the concept of solar cities and solar villages. In solar cities and solar villages, 20% of the energy requirement will be met from solar energy.
HERC had earlier announced that open access solar consumers in the state would not have the net metering facility.
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Rahul is a staff reporter at Mercom India. Before entering the world of renewables, Rahul was head of the Gujarat bureau for The Quint. He has also worked for DNA Ahmedabad and Ahmedabad Mirror. Hailing from a banking and finance background, Rahul has also worked for JP Morgan Chase and State Bank of India. More articles from Rahul Nair.