Solar policy & project development

Report on Solar Power Policies
&
Project Development in India
Sumit Mishra

Table of Content
I : Introduction…………………………………………………………… 3
II : Solar Technology …………………………………………………….. 3
1. Solar Photovoltaic (PV)……………………………………………. 3
2. Concentrating Solar Power System (CSP) …………………………. 4
3. Solar Heating & Cooling …………………………………………… 4
III : Working of solar PV ………………………………………………….. 4
IV : Photovoltaic Technologies ……………………………………………. 5
1. Crystalline Silicon …………………………………………………… 5
2. Thin Film ……………………………………………………………. 5
V : India’s Solar Market ……………………………………………………. 6
VI : Policy Initiative ………………………………………………………… 8
1. Jawaharlal Nehru National Solar Mission …………………………... 10
a. JNNSM Phase I…………………………………………………… 10
b. JNNSM Phase II ………………………………………………….. 11
c. JNNSM Phase II Batch I ………………………………………….. 12
d. JNNSM Phase II Batch II ………………………………………… 13
2. State Solar Policies ………………………………………………….. 13
3. Renewable Purchase Obligation …………………………………….. 16
4. Net Metering Policy ………………………………………………… 16
VII: Development of Solar PV Project ………………………………………. 18
1. Land/ Site selection …………………………………………………. 18
a. Solar Resources ………………………………………………….. 18
b. Available Area …………………………………………………... 19
c. Climate & topography …………………………………………… 19
d. Accessibility & RoW ……………………………………………. 20
e. Grid Connection …………………………………………………. 20
f. Water Availability ……………………………………………….. 20
2. Pre-Feasibility & Feasibility Study …………………………………. 20
3. Engineering, Procurement & Construction Contract …………….…. 20
4. Transmission Agreement ……………………………………………. 21
5. Clearances & Approvals …………………………………………….. 21
6. Operation & Maintenance Contract …………………………………. 22
VIII: Conclusion …………………………………………………………… 22

I: Introduction: Solar energy is the energy received from the Sun that sustains
life on Earth. For many decades solar has been considered to be a huge source
of energy & also economical one because it is freely available. However, it is
only now, after years of research that technology has made it possible to harness
solar energy. Key benefits of solar power is:
1. Freely available in abundant quantity.
2. Environment friendly
3. No fuel cost
4. Low operation & maintenance cost.
Basic principles of Solar Technology is that , the sun rays contains energy, and
normally when these rays hit an object that energy turns to heat but when these
rays hit silicon (Solar Cell), the energy becomes an electrical current that can be
harnessed for power. Silicon is the main ingredient in solar panels and is used to
capture the sun’s energy and turn it into electricity. This electricity is then
converted into clean, affordable power for your home. The whole process is
represented in Figure 1.
Figure 1: Generation of Solar Energy
II: Solar Technologies:
Solar energy is the cleanest, most abundant renewable energy source available.
Today's technology allows us to harness this resource in several ways. There are
three primary technologies by which solar energy is commonly harnessed:
1. Solar Photovoltaic (PV): These solar technologies directly produce
electricity which can be used, stored, or converted for long-distance
transmission. PV panels can be manufactured using a variety of materials
and processes and are widely-used for solar projects around the world.

2. Concentrating Solar Power system (CSP): Using reflective materials like
mirrors and lenses, these systems concentrate sunlight to generate thermal
energy, which is in turn used to generate electricity. Similar to traditional
power plants, many CSP plants are hundreds of megawatts (MW) in size
and some can continue to provide power after sunset
3. Solar Heating & Cooling: These technologies generate thermal (heat)
energy for water & pool heating and space heating. This type of
technology is generally used in houses for water heating.
III: Working of Solar PV: The main components of a PV power plants are:
1. Solar PV Modules: These convert solar radiation directly into electricity
through the photovoltaic effect in a silent and clean process that requires no
moving parts. The PV effect is a semiconductor effect whereby solar
radiation falling onto the semiconductor PV cells generates electron
movement. The output from a solar PV cell is direct current (DC) electricity.
A PV power plant contains many cells connected together in modules and
many modules connected together in strings to produce the required DC
power output.
2. Mounting Systems (Tracking –optional): These allows PV modules to be
securely attached to the ground at a fixed tilt angle or on sun tracking
frames.
3. Inverters: These are required to convert DC electricity to alternating current
AC for connection to the utility grid.
4. Step up Transformers: The output from the inverter generally requires a
further step-up in voltage to reach the AC grid voltage level.
5. Grid connection: This is where electricity is exported into the grid network.

Figure 2: Overview of Solar PV system
The above mentioned components collectively form a Solar PV system. The
complete assembly of solar power PV system is shown in figure 2.
A valuable feature of photovoltaic systems is the ability to connect with the
existing power grid which allows owners to sell excessive electricity back to the
utility with a plan known as Net Metering. At times when you are not using all
of the electricity produced by your system, your meter will spin backwards
selling the electricity back to the utility power grid.
IV: Photovoltaic Technologies:
The large variety of PV applications allow for a range of different technologies
to be present in the market , from low cost , lower efficiency technologies to
high efficiency technologies at high cost. Commercial PV modules may be
divided into two broad categories:
1. Wafer based Crystalline Silicon (C-Si) (Manufactured by cutting wafers
from solid ingot block of silicon). The Crystalline Silicon (C-Si) modules
represent 85-90% of the global annual market today. They are further
subdivided into Mono-crystalline silicon or Poly-crystalline silicon. Mono-
crystalline silicon cells are generally the most efficient, but are more costly
than poly—c-Si.
2. Thin films technologies (in which a thin layer of a semiconductor material is
deposited on low cost substrates).Thin films currently account for 10% to
15% of global PV module sales. Thin film cells provide a cheaper
alternative, but are less efficient. There are three main types of thin film
cells: Cadmium Telluride (CdTe), Copper Indium (Gallium) Di-Selenide
(CIGD/CIS) and Amorphous Silicon (a-Si).

Figure 3. Types of S-PV technologies
The efficiency of different PV technology commercial modules is as follows:
Figure 4. Efficiency Chart of PV cells
The cost of a project is highly dependent upon the type of PV technology
adopted because the total cost of the system /project are composed of the sum of
module cost , efficiency of module, land required , balance of system , inverter
etc. The better the efficiency of a solar PV system the lesser the land required
for installation of PV system.
V: India’s Solar Market:
India is located in the equatorial sun belt of the Earth & hence receives
abundant radiant energy from sun. India receives high Solar Irradiation in most
parts of the country – annual average Global Horizontal Irradiation of 5.1, with
large number of sunny days (approx. 330). Because of high GHI in some part of
the country we can achieve a Capacity Utilisation Factor (CUF) of 21-23 %.
This means that a 1 MW solar power plant can produce 1.85 million units of
electricity per year.
Solar PV
Technology
Crystalline
Silicon
Mono
Crystalline
Poly Crystalline
Thin Film
Amorphous
Cadmium
Telluride
(CdTe)
Copper Indium
Di-Selenide
CIS/CIGS
10-12%
CdTe
9-11%
a-Si;a-Si/µc-Si
6-9%
Wafer Based C-Si
Technology
Thin Films Technology

Considering the Solar ir-radiation data, available waste land & other factor, it is
estimated that our country has a solar potential of 748 GWp. The state wise
solar potential detail is presented in table 1 below:
State Solar
Potential
(GWp)
State Solar
Potential
(GWp)
State Solar
Potential
(GWp)
Rajasthan 142.31 Telangana 20.41 Nagaland 7.29
Jammu &
Kashmir
111.05 Chhattisgarh 18.27 West
Bengal
6.26
Maharashtra 64.32 Jharkhand 18.18 Kerala 6.11
Madhya
Pradesh
61.66 Tamil Nadu 17.67 Meghalaya 5.86
Andhra
Pradesh
38.44 Uttarakhand 16.80 Sikkim 4.94
Gujarat 35.77 Assam 13.76 Haryana 4.56
Himachal
Pradesh
33.84 Bihar 11.20 Punjab 2.81
Odisha 25.78 Manipur 10.63 Tripura 2.08
Karnataka 24.70 Mizoram 9.09 Delhi 2.05
Uttar
Pradesh
22.83 Arunachal
Pradesh
8.65 Goa & UT 1.67
Table 1: State wise Solar Potential
The outlook of solar sector in India is extremely positive, driven by powerful
underlying fundamentals such as rising cost of conventional power,
environmental concerns, falling costs of Solar power, high solar ir-radiation , a
high power deficit & the ability of solar to quickly bring power generation
capacity online. These fundamental coupled with several state & central
government initiatives should result in India becoming one of the largest solar
market in the world.
A SWOT analysis of Indian solar market is carried out for understanding the
strength, weakness, opportunity & threat to Indian Solar energy sector.

Figure 5: SWOT Analysis for developing Solar Project in India
VI: Policy Initiative: The Government of India (GoI) has taken several
initiative to promote solar energy market in India not only for energy security
but also for their commitment towards global warming.
Several policy at national & state level has been announced & highly ambitious
target has been set by the respective government. In the last 5 years India has
seen tremendous growth in its Solar installed capacity from a mere 22 MW in
2010 to 4011 MW by May 2015. This installed capacity is a result of
introduction of various policies viz. National solar Mission (Phase I & II) state
solar policies & REC mechanism etc. State wise solar installation detail is
presented in figure 6 below.
Strength
1. High Growth industry with significant future
potential.
2. Sunlight is available in sufficient quantity in
many regions.
3. Proven technology with low operation &
maintenance cost , which is also scalable.
4. Availability of Governmant incentives for
growth & expansions.
Weakness
1. Owing to high capital costs, the business
needs external incentives to be economical
feasible , thus increasing dependence on
Governmental policies.
2. The Capital intensive nature of the business
might favour larger business over smaller one.
3. The distributed & intermittent nature of solar
energy makes it difficult for utilities to rely on
Solar PV for their base load.
Opportunities
1. Government ambitious target & attractive
policies open up many avenues for
investment.
2. Opportunities exist all along the Solar PV
business value chain.
3. Entirely new opportunities could open up as
there is high innovation in technology,
especially with reduction in cost in future.
Threats
1. Off Peak season reduces cash flow.
2. Finding skilled manpower is a issue.
3. Solar Panels work only at 22% efficiency
therefore achieving solar targets could be
difficult despite scaling up .
SWOT Analysis

Figure 6: Utility Scale Solar Installed Capacity…as of May’15
Under National solar Mission GoI targets for setting up of 20,000MW (Revised
to 100,000 MW) solar capacity shows commitment of the government towards
development of solar market in India.
The announcement of various state level policies and the allocations under
NSM (Phase 1 &2) have brought fresh excitement to the market. Government
policies have so far been the prime driver for the solar energy sector in India
however there has been a gradual move from an incentive driven market to a
parity driven market. In addition to NSM and state policies developer also have
the option of setting solar power plant for captive purpose and avail benefit of
selling green attributes in the form of Renewable Energy Certificates (RECs) at
power exchanges.
Various states have now introduced their Net metering policies to attract
development of rooftop in their respective states. Net Metering is the regulatory
ability to get credit for electricity user generate with solar energy and send
backwards through their utility meter. Exact provisions vary with each state, but
the effect is to allow user to generate excess power during the day, and use it at
night, without needing batteries. For the injected quantity user will be
incentivise as per the rate fixed under the Net metering policy of their respective
states.
228
6
4
953
19
99
354
71
240
1128
164
5
68
18
637
7
5
2
1
2
0 200 400 600 800 1000 1200
Andhra Pradesh
Chhattisgarh
Delhi
Gujarat
Haryana
Karnataka
Maharashtra
Odisha
Punjab
Rajasthan
Tamil Nadu
Uttarakhand
Uttar Pradesh
Jharkhand
Madhya Pradesh
West Bengal
Andaman & Nicobar
Chandigarh
Lakshadweep
Other
Installed Capacity in MW

A detailed discussion on the respective policies is presented in the later part of
the report for better understanding.
Installed Solar Capacity in India under various policies:
Figure 7: India’s installed solar capacity under different policies
1. Jawaharlal Nehru National Solar Mission (JNNSM): The Jawaharlal
Nehru National Solar Mission (JNNSM) was the major initiative of
Government of India (GoI) and state government to promote ecologically
sustainable growth while addressing India’s energy security challenges. It
plays a prime role in India's contribution to the fight against issues of climate
change, which was the big concern across the globe. The launch of the
National Solar Mission (NSM) has given a big impetus to solar energy in
India. The Mission adopted a 3 phase approach, spanning the period of the
11th Five Year Plan and first year of the 12th Five Year Plan (up to FY2012-
Projects under NSM Projects under State Policy Projects under other policies

13) as Phase 1, the remaining 4 years of the 12th Plan (FY2013-17) as Phase
2 and the 13th Plan (FY17-22) as Phase 3.
To facilitate grid connected solar power generation under phase I without
any Government subsidy, GOI approved NTPC Vidyut Vyapar Nigam Ltd
(NVVN) as the nodal agency to purchase 1,000 MW from project developers
and sell this bundled power to the distribution utilities. The concept of
Bundling was introduced to select projects of 500 MW capacity each based
on solar thermal and PV technologies.
On 18th June 2015, in a major policy move, the government has announced
a massive scaling up of the targets for India's solar power capacity target
under Jawaharlal Nehru National Solar Mission (JNNSM) by five times,
reaching 1,00,000 MW by 2022.
The target will principally comprise of 40 GW (solar) rooftop & 60 GW
through large and medium scale grid connected solar power projects.
Toward achieving this target the government envisages a total investment in
setting up 100 GW will be around Rs 6, 00,000 crores. In the first phase, the
Government of India is providing Rs 15,050 crores as capital subsidy to
encourage solar energy based projects. This capital subsidy will be provided
for Rooftop Solar projects in various cities and towns, for Viability Gap
Funding (VGF) based projects to be developed through the Solar Energy
Corporation of India (SECI) and for decentralised generation through small
solar projects. The new solar target of 100 GW is expected to result in the
reduction of over 170 million tonnes of carbon dioxide, a gas contributing to
climate change.
a. JNNSM Phase 1: During Phase 1, a total of 1000MW of Solar Power
Projects were selected, with solar PV and Solar Thermal projects to be
allocated in the ration of 50:50. It was divided into batch 1 & 2 over FY
2010-11 & FY 2011-12, respectively. The highlight of Phase 1 is presented
in Table-2 below.
NSM Phase 1, Batch 1 NSM Phase 1, Batch 2
Managed by NVVN NVVN
Capacity
allocation
PV: 150 MW (PPA signed only
for 140MW)
CSP: 470 MW
PV: 350 MW (PPA signed
only for 340 MW)
CSP: Nil

Maximum &
Minimum
Project Capacity
PV: Min: 5 MW, Max: 5 MW.
CSP: Min: 5MW, Max:100 MW
(Max. of 3 project locations
Min: 5 MW,
Max: 20 MW
Maximum
capacity by a
bidder
PV: 5 MW,
CSP: 100 MW
50 MW
Domestic
Content
Requirement
(DCR)
PV: For projects based on c-Si
technology, the modules must
have been manufactured in India
CSP: 30% domestic content
mandatory
For Projects based on c-Si
technology, the modules
must have been
manufactured in India
Policy
Mechanism
Preferential feed-in tariff Preferential feed-in tariff
Allocation
Method
Reverse bidding on benchmark
tariff (per kWh): PV: INR
17.91/kWh, CSP: INR
15.31/kWh
Reverse bidding on
benchmark tariff (per
kWh): INR 15.39/kWh
Commissioning
time period
PV: 12 months, CSP: 28 months 13 months
Weighted
average of
winning bid
PV: INR 12.16/kWh ,
CSP: 11.48/kWh
PV: INR 8.77 / KWh
Project
Commissioned
PV: 140 MW,
CSP: 50 MW
PV: 330 MW
Technology
breakdown
Thin film: 55%, rest:
polycrystalline
Thin film: 75%, rest:
polycrystalline
Required bank
guarantee
INR 5 million/MW INR 5 million/MW
Table 2: Highlights of JNNSM Phase I
b. JNNSM Phase II : Out of the 60 GW of utility scale solar planned by 2022,
15 GW is expected to be developed under the National Solar Mission (NSM)
by 2019 using a combination of different structures including bundling of
Power , VGF, and interest rate subvention.
Proposed share of Solar PV and Solar Thermal at Central/State levels
during phase II:
Item
Description
Share Central Scheme State Scheme
Percentage
%
MW Percentage
%
MW Percentage
%
MW
Solar PV 70 10500 40 4200 60 6300

Solar
Thermal
30 4500 40 1800 60 2700
Total 100 15,000 - 6000 - 9000
Table 3: Proposed share of PV & CSP under Phase II at Central & State level
c. JNNSM Phase II Batch I: The total capacity targeted under this phase is
750 MW & all of the projects will use photovoltaic technology. The winners
were the project developer who sought the minimum possible funds to make
their projects viable to sell power to SECI at a tariff of Rs 5.45/kWh (Rs
4.75/kWh for project claiming accelerated depreciation) for 25 years. With
an object to promote local manufacturing, SECI invited bids in two separate
categories, reserving half of the projects under domestic content requirement
(DCR) restrictions.
Time Frame for JNNSM Phase II Batch I is as follows:
Sr. No Event Date
1 Approval of RfS documents by SECI Zero date
2 Issue of RfS documents (Sale of
Documents)
Zero date + 7 Days
3 Submission of Bids (Techno-
Commercial & Financial) Opening of
Techno-Commercial bids
Within 60 days from issue of
RfS
4 Evaluation of Techno-Commercial
bids & shortlisting of bidders
Within 60 days from
submission of bids
5 Opening of Financial bids Within 7 Days from
shortlisting of bidders
6 Issue of Letter of Intents ( LoI) Over a period of 15 days after
opening of financial bids
7 PPA Signing Within 30 days from the date
of signing of PPA
8 Financing arrangement Within 210 days from the date
of signing of PPA
9 Commissioning of Projects Within 13 months from the
date of signing of PPA
Table 4: Timeline for JNNSM Phase II batch I
d. JNNSM Phase II Batch II: MNRE proposed to add a total Solar PV
capacity of 15000 MW in three tranches to be implemented through NVVN
as part of Phase-II Batch-II. The scheme envisages setting up of Grid-
connected solar PV power plants of 15,000 MW aggregate capacity through
open competitive bidding as under:

(i) Tranche-I: 3,000 MW: 2014-15 to 2016-17 (Bundling with 1500 MW
unallocated NTPC Power from Coal Station allocated by MoP).
(ii) (ii) Tranche-II : 5,000 MW: 2015-16 to 2017-18 (selection mechanism
to be decided later)
(iii) (iii) Tranche-III : 7,000 MW: 2016-17 to 2018-19 ( selection
mechanism to be decided later)
2. State Solar Policies: In addition to the National Solar Policy, various states
have also announced State Level Policies aimed at encouraging investment
in their respective states. State Solar policies & capacity addition are usually
driven by three broad factors:
a. Renewable Purchase Obligation , (RPO)
b. Demand for new power generation capacity
c. Political commitment to the renewable sector.
States like Tamil Nadu, Andhra Pradesh, Karnataka, Jharkhand, Bihar and
Odisha etc. has come up with their solar policies. All these policies are more
concentrated towards the central agenda of reaching 100GW by 2022 and
thus almost all the policies have kept the provisions of various incentives and
benefits to the developer. A target of 50 GW has been set under the state
policies, a brief of various state policy is shown in table 5 below:
State PolicyTarget OffTaker Financialincentive ExemptionfromOAcharges OtherKeyBenefits DCR
AndhraSolarpolicy 5000MWby
2019
2GWtoState
Discoms
3rdPartyallowed
1.100%bankingforallcaptive&
OAduringall12monthsofthe
year.
2.Bankingcharge@2%of
energydeliveredwillbeadjusted.
Wheelingchargesexempted.
2.Distributionlossbelow
33KV-exempted.
4.CSSexemptedfor3rd
partysaleandcaptive
projectsfor5year
Exemptedfromobtaining
Pollutionclearances
EDexemptedfor3rdparty
sale,captiveconsumption
andsaletodiscom.
None

Table 5: Brief of State Solar Policies
Bihar Solar Policy 130 MW Captive , State
Discom & 3rd Party
No entry tax .
Incentive as per industry policy
applicable.
Wheeling & Transmission
charges as applicable.
ED exempted None
Chhattisgarh Solar
Policy
500 to 1000
MW by 2017
Captive & 3rd Party Stamp duty exempted.
Concession on land premium.
1. Not exempted (OA
Charges & losses applicable
as per CSERC order)
2. Wheeling & Transmission
charges applicable.
ED exempted on auxiliary
consumption & captive
consumption within the
state.
None
Gujarat Solar Policy Not defined Captive , State
Discom & 3rd Party
No additional financial incentive. No exemption ED exempted
CSS exempted
None
Haryana Solar Policy 100 MW State Discoms Incentive as applicable under
Industrial policy
No exemption Exemption from land use
charges
None
Jharkhand Solar Policy 2500 MW Captive , State
Discom & 3rd Party
100% Banking allowed.
VAT & Entry tax exempted.
Wheeling charge &
Distribution loss exempted.
ED Exempted , Pollution
clearance exempted.
None
Karnataka Solar Policy 2000 MW State Discoms , 3rd
Party , Captive
Concession on Stamp duty ,
registration charges & entry tax
as per industrial policy.
Banking charges waived.
Transmission charges ,
wheeling charges & CSS
waived for 10 Years.
ED exempted None
Kerala Solar Policy 500 MW by
2017
2500 MW by
2030
State Discoms , 3rd
Party , Captive
Banking facility available to
captive generator.
No OA Charges ED exempted.
Evacuation infrastructure
construction by state(for 10
MW below)
None
Maharashtra Solar
Policy
7500 MW by
2019
State Discoms , 3rd
Party , Captive
50% of transmission &
wheeling charges waived.
75% of CSS waived
ED exempted for 10 year.
Pollution clearance
exempted
None
MP Solar Policy 300 MW State Discoms , 3rd
Party , Captive
100% banking allowed in a FY @
2% of the banked energy.
VAT & entry tax exempted.
Transmission & Wheeling
charges reduced to 2% of
energy injected.
Wheeling Charges & CSS
waived
ED & Cess exempted for 10
year.
None
Odisha Solar Policy 135 MW by
2015
State Discoms , 3rd
Party , Captive
100 % banking allowed Wheeling & Transmission
charges applicable.
CSS waived.
ED exepmted None
Punjab Solar Policy 1000 MW by
2022
State Discoms , 3rd
Party , Captive
Banking Charges waived Transmission & Wheeling
charges reduced to 2% of
energy injected.
-
None
Rajasthan Solar Policy 25000 MW State Discoms , 3rd
Party , Captive
Banking allowed as per RERC
regulation.
OA charges applicable Pollution clearance not
required.
None
Tamil Nadu Solar
Policy
3000 MW by
2015
Obligated Entities
State Discoms
Preferential tariff based on
reverse bidding for a part of the
target
50% of transmission &
wheeling charges waived.
Single Window Clearance
GBI for residential
consumers
None
Telangana Solar Policy 5000 MW by
2019
State Discoms , 3rd
Party , Captive
100% Banking allowed. Wheeling charge exempted
for captive use within the
state.
CSS exempted for 3rd party
within the state.
ED Exempted , Pollution
clearance not required.
None
UP Solar Policy 500 MW by
2017
State Discoms Preferential tariff based on
reverse bidding
Wheeling & Transmission
charges exempted
Evacuation infrastructure
construction by state.
None
Uttarakhand Solar
Policy
500 MW by
2017
State Discoms , 3rd
Party , Captive
VAT & entry tax exempted. wheeling charges as per
state tariff.
Other OA charges as per
state tariff.
CSS waived None
West Bengal Solar
Policy
500 MW by
2022
Discoms LC from a nationalize bank as
apayment security.
Other concession and incentive
as per MNRE policy.
- -
None

As per the revised NSM target 60 GW of capacity should be utility scale A 60 GW
solar capacity should be from utility scale grid connected project and remaining 40
GW from off grid. To achieve that several states have revised their target under their
respective state policy. Figure 8 below shows the target set by the state under their
respective policies.
Figure 8: Targets set under state solar policies

3. Renewable Purchase Obligation (RPO): The Government of India (GoI),
through the central Electricity Regulatory Commission (CERC) has
introduced a Renewable Purchase Obligation (RPO’s) for all renewables as
per the requirement of the National Action Plan on Climate Change
(NAPCC). As per the RPO requirements, 15% of all power in the country
has to be sourced from renewable energy sources by 2020. For solar power
in particular, the RPO requirement is 3%. Individual state electricity
regulatory commission (SERC’s) have taken up this directive & have set
specific state targets. In addition, the government has introduced a market
tradable Renewable Energy Certificate (REC’s) for fulfilling Renewable
Purchase obligation. Under the REC mechanism developer are eligible to
receive one certificate for every 1000 kWh of renewable electricity fed into
the grid. Obligated Entities can buy these certificates to fulfil their
obligation.
4. Net Metering Policy: The concept of net metering involves recording the net
energy between export of generated energy and import of energy from
distribution licensee for a given period of time. This involves the usage of a
bi-directional meter which has the facility to record both import and export
values. Under the net metering system, the excess energy generated by the
solar photovoltaic plant at a given point of time is exported to the grid
instead of being stored using a battery. However when there is a deficit in
the power generated by the solar panels either during the night or a cloudy
day, energy is drawn from the grid. At the end of the billing period, if more
energy is exported to the grid than imported, then the distribution licensee
pays the consumer at a pre-determined price. On the other hand if more
energy is imported from the grid than exported, then the consumer pays the
distribution licensee at a predetermined price. These prices usually vary from
state to state.
As a part of the regulatory overhaul many state has come up with their Net
metering policy & brief of the respective state Net metering policy is
presented in table 6 below:

Table 6: Net metering policies of various state
State Cap on Solar
installation / injection
Grid penetration as
% of distribution
transformer capacity
Eligibility Excess
electricity
settlement
Project capacity
limit
Andhra Pradesh 100% of the electricity
consumption in a
billing month
Not mentioned Preferably allowed for 3
Phase service consumer
however single phase
consumer upto 3kW are alos
eligible.
As per APPC Upto 1 MW
Bihar Not Mentioned 15% Not Mentioned To be carried
forward to next
billing cycle
Maximum 1 MWp
Chhattisgarh Not Mentioned Annual energy
injection shall not
be more than 49% of
the annual net
generation
Not Mentioned To be billed at
50% of the
solar tariff (in
case energy
injected is less
than 49% of
annual net
generation)
50kWp to 1 MWp
capacity
Delhi system size less than
contracted load
20% All consumer As per APPC Above 1 kW
Goa & UT Not Mentioned 30% Consumer with single or
three phase supply
connection
As per Solar
tariff
1kWp to 1MWp
Haryana Injection < 90% of the
consumption in a year
15% All consumer To be carried
forward to next
billing cycle
1kWp to 1MWp
Himachal Pradesh Not Mentioned Not mentioned All consumer Not Mentioned Maximum 1 MWp
Karnataka Not Mentioned Not mentioned All consumer As per Solar
tariff (currently
9.56 /Unit
without
subsidy) & Rs
7.20 /Unit with
subsidy of 30%
Upto 500kWp
Kerala Not Mentioned 50% All consumer categories
availing electricity at
voltage level of and below
11kVA
As per APPC
(Rs. 1.99/Unit)
1kWp to 1MWp
Madhya Pradesh Not Mentioned Not mentioned All consumer Not Mentioned Not mentioned
Mahrashtra Not Mentioned Not mentioned Not Mentioned As per APPC Not mentioned
Meghalaya Not Mentioned Not mentioned All consumer Not Mentioned Maximum 1 MWp
Odisha Injection < 90% of the
30% All consumer No Payment Not mentioned
Punjab System size < 80% of
the contracted load
30% All consumer As per retail
supply tariff of
that consumer
1kWp to 1MWp
Rajasthan System size < 80% of
the contracted load
30% All consumer As per Solar
tariff (currently
@ Rs 6.63/Unit)
1kWp to 1MWp
Tamil Nadu Injection < 90% of the
30% Government run institution
& residential consumer
No Payment Not mentioned
Uttar Pradesh system size less than
contracted load
15% All consumer At Rs 0.50 /
Unit
More than 1 kW
Uttarakhand Not Mentioned Not mentioned All consumer As per Solar
tariff (currently
@ Rs 9.92/Unit)
5kW to 500kW
West Bengal Injection < 90% of the
Not mentioned Institutional consumers like
Hospitals , Government
departments academic
institutions etc
As per APPC Upto 5 kW

VII: Development of Solar PV project:
The key steps for developing a solar PV project are well established & yet there
is no definitive detailed “road map” a developer can follow. The approach taken
in each project depends on site –specific parameters & the developer’s
priorities, risk appetite, regulatory requirement & the types of financing support
mechanism available in the given market. However in all cases certain activities
need to be completed that can be broadly be organized in the following 6 steps:
Figure 9: Steps for setting up of Solar Power Plant
1. Land /Site selection: Selecting a suitable site is a crucial part of developing a
viable project. In selecting a site the aim should be to maximise output and
minimise cost & the process of site selection must consider the constraints of
each site & the impact it will have on the cost of the electricity generated. The
main constraints that need to be assessed include:
a. Solar resources: The higher the resources the greater the energy yield per
kWp installed. When assessing the Global Horizontal Ir-radiation (GHI) at
site care must be taken to minimise any shading that will reduce the ir-
radiation received. Map showing India’s solar ir-radiation data is shown in
figure 10.
Land/Site
Selection
prefeasibility
& feasibility
study
Appointment
of EPC
contractors &
equipment
order.
Clearances &
approvals
Transmission
Agreement
O & M
Contractor

Figure 10: India’s solar Ir-radiation data
b. Available Area: The area required per kWp of installed capacity varies
with the technology chosen. Sites should be chosen with sufficient area to
allow the required capacity to be installed without having to reduce the
pitch (i.e. distance between rows of module) to levels that cause
unacceptable yield loss.
Depending upon the site location (altitude) the land required for a 1 MW
power plant setup is around 4.5-5 acres for crystalline technology and
around 6.5-7.5 acres for Thin-Film technology. This is only a rough
benchmark and may vary based on technology and efficiency of panels.
c. Climate & topography: In addition to a good solar resources, the climate
should not suffer from extremes of weather that will increase the risk of
damage or downtime.

Site should be flat or on a slight south facing slope in the northern
hemisphere or north facing slope in the southern hemisphere.
d. Accessibility & ROW: The site should allow access for trucks to deliver
plant & construction materials. The closer the site is to a main access road,
the lower the cost of adding this infrastructure. Row (i.e. access rights for
transmission lines on private land) should be exercised before finalising
the land.
e. Grid Connection: A grid connection of sufficient capacity is required to
enable the export of power. The viability of the grid connection will
depend on factors such as capacity, proximity, ROW, grid stability & grid
availability.
f. Water availability: Clean, low mineral content water is preferred for
cleaning modules. A reliable supply is required for module cleaning.
Other parameter which should be analysed before site selection are
geotechnical, geopolitical, module soiling & financial incentive etc.
2. Pre-feasibility & feasibility study: The aim of a prefeasibility study is to
develop a preliminary plant design & investment requirements, which allow
further assessment of the financial viability of the project. The prefeasibility
study should at minimum include an assessment of:
a. The project site & boundary area, ensuring access to the site is possible, both
legally & technically.
b. A conceptual design of the project giving different options of technology &
the financial impacts, including estimation of installed capacity.
c. Estimate cost of land & energy yield of the project.
d. A financial model to determine the commercial viability of the project for
further investment purposes.
e. Grid connection cost & likelihood of achieving a connection within the
required timeline.
f. Permitting requirements, costs, & likelihood of achieving consent.
The objective of the feasibility study is to provide more detailed information on
the potential project design, the investment requirements, and to plan for
financing and implementation. If the results of the study are favourable, the
developer should be prepared to invest more to advance the project to the
financing stage.
3. Engineering, Procurement, and Construction (EPC) contract:
Engineering, procurement and construction (EPC) contracts are the most
common form of contract for the construction of solar PV power plants. Under
an EPC contract, a principal contractor is engaged to carry out the detailed

engineering design of the project, procure all the equipment and materials
necessary, and then construct and commission the plant for the client.
The EPC contract for any project-financed solar PV power plant will typically
be held between a project company (the owner) and the EPC contractor (the
contractor). It is common practice to use a standard form of contract (sometimes
referred to as a “boilerplate contract”) as a template and basis for the EPC
contract.
The key clauses for a project owner in any construction contract are those that
relate to time, cost and quality. In the case of solar PV power plant construction,
a strong EPC contract will address the following areas:
 A “turnkey” scope of work.
 A fixed completion price.
 A fixed completion date.
 Restrictions on the ability of the contractor to claim extensions of time
and additional costs.
 A milestone payment profile that is suitably protective to the owner and
based upon the completion of predefined sub-tasks.
 Plant PR guarantees.
 LDs for both delay and performance.
 Financial security from the contractor and/or its parent organisation.
 A defects warranty.
4. Transmission agreement - The project developer will need to sign a
transmission agreement with the States respective STU.
5. Clearances & approvals: Clearances & approvals requirements for solar
PV power plants vary greatly from country to country and within different
country regions. It is important therefore to establish with the appropriate
planning/ government authority the relevant laws/ regulations and associated
clearances & approvals that will be required for the project. In some of the
states, State Nodal agency acts as a facilitator for getting clearances. Major
clearances which need to be obtained are:
a. Consent to Establish and Consent to Operate from State Pollution
Control Board
b. Import/License in case of import of plant and machinery.
c. No objection certificate from Civil Aviation Department.
d. No objection certificate from District Collector for setting up the project.
e. No objection certificate from the Panchayat under which the project area
is located.
f. Approval for water requirement in case of solar thermal projects.

g. Permission for laying power evacuation lines from Chief Electrical
Inspector.
h. No Objection Certificate from energy department.
i. Permission for 'Implementation of Metering Code', 'Protection System' to
be obtained from host Distribution Utility or the STU or the Central
Transmission Utility as the case may be.
6. Operation & Maintenance (O&M) contract: Compared to other power
generating technologies, solar PV power plants have low maintenance &
servicing requirements. However proper maintenance of a PV plant is
essential to maximise both energy yield & the plant’s useful life.
The presence of an operation & maintenance (O&M) contract is crucial to
define the parameter for the operation & maintenance of a project during its
life. The project developer shall appoint a private O&M contractor and enter
into an O&M contract. This shall specify details regarding project uptime,
personnel required, spare acquisition etc. for project operation and
management.

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