Karnataka Solar Policy: State Revises Solar Installation Target to 6,000 MW by March 2021

January 31, 2017


The government of Karnataka has announced amendments to the Karnataka State Solar Policy 2014-21. The estimated solar energy potential of the state has been updated from 20 GW to 24.7 GW and the targeted solar capacity has been increased to 6,000 MW by March of 2021 which is 4,000 MW more than the previous target. The change in the target has been made to reflect the new tariff policy and targets fixed for the state by the Ministry of New and Renewable Energy (MNRE).

Out of the targeted 6,000 MW, 40 percent (2,400 MW) is designated for rooftop solar installations. The solar power generation in the state will be limited to 200 MW/taluk from all sources of power other than rooftop solar, to avoid grid congestion.

In the policy, the Karnataka Renewable Energy Development Limited (KREDL) has regulated that for solar projects of captive, group captive and IPP for third-party sale, a transfer fee of Rs. 150,000 (~$2,198)/MW and yearly extension fee will be charged starting at Rs. 100,000 (~$1,465)/MW for first year of extension.

D.K. Shivakumar, Energy Minister of Karnataka, at the recent Renewable Invest Karnataka 2017 conference stated that Karnataka has one of the best and favorable policy for solar and distributed generation, which was evident in a recent auction when the state awarded around 1,200 MW spread across 60 taluks to reduce grid constraints. 100 MW was dedicated for manufacturers within the state.

The Minister also said strict guidelines have been issued to the KPTCL (the state-owned transmission company) and DISCOMS regarding wheeling, banking and transmission charges. He confirmed that payment dues have come down and are much lower compared to Maharastra’s Rs. 32,000 Crore (~$4.7 billion) and Tamil Nadu’s Rs. 20,000 Crore (~$2.9 billion). He agreed that lower level state government officials have not been very cooperative but measures have been taken to educate and bring awareness.

The government of India issued a tariff policy on January 28, 2016, revising Karnataka’s solar renewable purchase obligation (RPO) to 8 percent. The change in target is necessary to comply with RPO according to an official at the KREDL. Over the last year, due to solar park issues, state solar RPO targets were not achieved, so policy change was required to accommodate the delay and under achievement in the past, added the official.

According to Mercom’s India Solar Project Tracker, Karnataka has installed over 500 MW large-scale solar capacity as of December 2016, with one of the largest project pipeline in the country at around 3.4 GW.

Image credit: By Polytropos-Commons (Own work) [GFDL (http://www.gnu.org/copyleft/fdl.html) or CC BY-SA 3.0 (http://creativecommons.org/licenses/by-sa/3.0)], via Wikimedia Commons