MNRE Lowers Benchmark Costs of Rooftop Solar Projects for FY 2022

The Ministry reduced the benchmark costs in the wake of revised GST rates


The Ministry of New and Renewable Energy (MNRE) has reduced the benchmark costs, excluding the Goods and Services Tax (GST), for grid-connected rooftop solar photovoltaic (PV) projects for the financial year (FY) 2021-22.

The revised benchmark costs for general category states vary from ₹35.89 (~$0.48)/W to ₹46.92 (~$0.62)/W (for capacities up to 500 kW). Earlier, they were in the range of ₹39.08 (~$0.53)/W to ₹51.1 (~$0.69)/W.

In August this year, MNRE issued benchmark costs for grid-connected rooftop solar photovoltaic (PV) systems for FY 2021-22.

The benchmark cost for FY 2021-22 is applicable for all projects to be awarded and for empanelment of vendors by state implementing agencies under phase-II of the MNRE’s rooftop solar program.

In its latest notification, MNRE said that after the revision of GST rates for renewable energy equipment, it decided to revise the benchmark costs excluding GST.

The applicable GST rates could be added to the benchmark costs to calculate the central financial assistance (CFA), MNRE said.

Benchmark Costs- MNRE

For special category states (North-eastern States, Uttarakhand, Himachal Pradesh, Jammu and Kashmir, and the Union Territories of Andaman and Nicobar and Lakshadweep), the revised benchmark costs are in the range of ₹39.47 (~$0.53)/W to ₹51.62 (~$0.69)/W. Earlier, the benchmark costs for various capacities up to 500 kW were in the range of ₹42.98 (~$0.58)/W to ₹56.12 (~$0.76)/W.

Subsidies for residential rooftop solar systems will be calculated based on the benchmark costs determined for the specific years or the lowest cost quoted in a tender, whichever is lower.

According to MNRE, subsidy under Phase-II of the grid-connected rooftop solar program will be available to all eligible households for installation of rooftop solar as per regulations of respective State Electricity Regulatory Commission and provisions of program implementation guidelines. Under the program, distribution companies—or its authorized agencies will invite Expressions of Interest (EoI) for empanelling the agencies to supply, install, test, and commission rooftop solar systems in residential premises. Bidders within the lowest bid (L1) price bracket will be empaneled and provide services to the consumers at the lowest agreed tariff rate.

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