Maharashtra Announces Incentives for Textile Units Setting up Solar Projects

The non-cooperative textile units in the state will be eligible for subsidies of up to ₹48 million


The Government of Maharashtra has announced incentives in the form of capital subsidies for solar project installations by textile units in the state.

The incentives are a part of the state government’s Department of Textiles’ Integrated and Sustainable Textile Policy, approved in June this year, and will stay effective through 2023-2028.

The policy provides electricity subsidies, support for effluent treatment plants, and zero liquid discharge facilities to help the industry transition to a more sustainable future.

In its policy, the state government stated that the textiles and apparel industry contributes 2.3% to the country’s GDP, 13% to industrial production, and 12% to exports.

Maharashtra accounts for 10.4% of the country’s total textile and apparel production. It also produces 272 million kgs of yarn, which is 12% of India’s gross production.

The new policy aims to strengthen the supply chain, focusing on how processes can be made more sustainable in the long term.

Electricity Subsidy

The government will provide electricity subsidies at a specified rate to existing textile units for two years. There will be a cap of ₹4 million (~$48,163) per textile unit per month on the disbursement of monthly electricity subsidy.

The sector-wise electricity subsidies are as follows:

Maharashtra Integrated and Sustainable Textile Policy 2023-2028 Electricity subsidies

Solar Power Subsidy

The capital subsidy for installing a solar power project will be calculated as 12/24 months of electricity subsidy or cost of installing a solar power project with a maximum 4 MW capacity or sector-wise capped amount, whichever is lower.

The policy has provided different capping limits for the capital subsidies to be disbursed to various sectors under the textile industry.

For Ginning and Processing; Private Spinning Mills; Private Power Looms; Knitting, Hosiery, Garmenting sector; Textile Parks; Sericulture; and Processing sector, the cap is set at ₹48 million (~$577,964).

For Co-operative Spinning Mills and Co-operative Powerlooms, it is set at ₹96 million (~$1.16 million).

The subsidies for solar projects will be disbursed only after the operationalization of the project in two equal installments with a gap of six months between them.

The new textile units or units undertaking expansion must include the solar project’s installation cost in their detailed project report. The capital subsidy will then be calculated on the fixed capital investment, including eligible plant, machinery, and solar projects up to a maximum of 4 MW capacity.

The detailed project report for the solar project will be analyzed and approved by the Maharashtra Energy Development Agency.

Textile units installing solar projects of more than 4 MW capacity will have to bear the cost of the exceeded capacity installation.

The total capacity of the solar power project is not allowed to exceed the approved load/contract demand of conventional energy by the unit.

The solar projects installed for textile units will not be bound by the 1 MW cap for net metering.

The textile units will be responsible for operating and maintaining the projects post-installation. If the projects were to become unserviceable, the tariff for electricity supplied by the Maharashtra State Electricity Distribution (MSEDCL) would be applicable without any subsidies.

According to the new policy, the state government’s energy department will not levy any charges other than transmission charges on projects using non-conventional energy sources.

If any of the textile units simultaneously uses conventional and non-conventional power, both power sources will be considered to decide the load factor.

The Handloom sector is not included under the subsidy program; however, it will be provided free electricity for up to 200 units per month under the Supply of Free Electricity to Handloom Weavers Households program.

Other Sustainable Measures

For the Processing Sector, in particular, the government has proposed the implementation of green technologies in the form of Effluent Treatment Plants (ETP), Common Effluent Treatment Plants (CETP), and Zero Liquid Discharge (ZLD).

For establishing ETP and CETPs, the government will provide a 50% capital subsidy or ₹50 million (~$602,046), whichever is lower across all zones in the state.

For ZLD technology deployment, the government will provide 50% of the eligible civil infrastructure, project, and machinery cost up to ₹100 million (~$1.20 million).

The cost of land will not be considered in the total project cost when calculating the subsidies.

The government also plans to set up 12 recycling projects under the program. It will provide a subsidy at 50% or ₹20 million (~$240,829), whichever is less, for these 12 new projects set up exclusively for recycling old textile products.

In August, the Maharashtra Electricity Regulatory Commission proposed amendments to the Distributed Open Access Regulations, 2016, in line with the Ministry of Power’s Green Energy Open Access Rules. According to the proposed amendments, consumers with a contract demand or sanctioned load of 100 kW or greater can obtain power from renewable sources via open access.

Mercom recently reported on how higher retail tariffs in Maharashtra have spurred commercial and industrial (C&I) consumers to opt for solar open access, helping them save up to 40% on electricity bills annually.

With more and more commercial and industrial entities adopting renewable energy for their electricity needs, Mercom India is hosting the ‘C&I Clean Energy Meet 2023’ in multiple cities across India, bringing together renewable energy industry stakeholders face-to-face with C&I  businesses who wish to transition to renewables.

The next event will be held in Coimbatore on September 15, 2023, at the Welcomhotel by ITC Hotels, Race Course.