the jawaharlal nehru national solar mission q

8/7/2019 The Jawaharlal Nehru National Solar Mission q

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The Jawaharlal Nehru National Solar Mission, also known as simply National SolarMission, is a major initiative of the Government of India and State Governments to promote

ecologically sustainable growth while addressing Indias energy security challenge. It willalso constitute a major contribution by India to the global effort to meet the challenges of

climate change. This is one of the several initiatives that are part of National Action Plan on

Climate Change.[1]

The program was officially inaugurated[2]

by Prime Minister of India,

Manmohan Singh

Goals

The objective of the National Solar Mission is to establish India as a global leader in solar

energy, by creating the policy conditions for its diffusion across the country as quickly as

possible. The immediate aim of the Mission is to focus on setting up an enabling environment

for solar technology penetration in the country both at a centralized and decentralized level.

The first phase (up to 2013) will focus on capturing of the low hanging options in solar

thermal; on promoting off-grid systems to serve populations without access to commercial

energy and modest capacity addition in grid-based systems. In the second phase, after taking

into account the experience of the initial years, capacity will be aggressively ramped up to

create conditions for up scaled and competitive solar energy penetration in the country.

[edit] Timeline

The Mission will adopt a 3-phase approach, spanning the remaining period of the 11th Plan

and first year of the 12th Plan (up to 2012-13) as Phase 1, the remaining 4 years of the 12th

Plan (201317) as Phase 2 and the 13th Plan (201722) as Phase 3. At the end of each plan,

and mid-term during the 12th and 13th Plans, there will be an evaluation of progress, review

of capacity and targets for subsequent phases, based on emerging cost and technology trends,

both domestic and global. The aim would be to protect Government from subsidy exposure in

case expected cost reduction does not materialize or is more rapid than expected.

[edit] Phase 1

The first phase of this mission aims to commission 1000MW of grid connected solar power

project by 2013. The implementation of this phase is in hands of a subsidiary ofNational

Thermal Power Corporation, the largest power producer in India. The subsidiary, NTPC

Vidyut Vyapar Nigam Ltd (NVVN,)[3]

will lay out guidelines for selection of developers for

commissioning grid connected solar power projects in India. While NVVN is the public face

of this phase, several other departments and ministries will play a significant role in

formulating guidelines. NVVN will sign power purchase agreements with the developers.

Since NVVN is not a utility, it will sell purchased power to different state utilities via

separate agreements.

[edit] Tariff

Tariff for solar power projects, like any other power projects, are determined based on

guidelines issued by Central Electricity Regulation Commission of India (CERC).[4]

[edit] Technologies


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For Phase 1 projects, NVVN proposed for 50:50 allocation towards Solar PV and Solarthermal. The latter is quite ambitious given India has no operational Solar Thermal projects

and less than 10MW of Solar PV projects. While growing at a rapid pace lately, solar thermaltechnologies are still evolving globally.

A growing solar PV industry is India is hoping to take off by supplying equipment to power

project developers. World's well known equipment manufacturers started increasing theirpresence in India and are sure to give a stiff competition to local Indian manufacturers. Due

to generally high temperatures in India, crystalline silicon based products are not the most

ideal ones. Thin film technologies[5]

like amorphous silicon,[6]

CIGS[7]

and CdTe could be

more suitable for higher temperature situations.

Solar thermal technology providers barely have a foothold in India. Few technology

providers like Abengoa[8]

have some Indian presence in anticipation of demand from this

mission. Many global players are gliding around and taking a wait and see approach via joint

ventures with local Indian partners.

[edit] Domestic Content Controversy

Initial guidelines for the solar mission mandated cells and modules for solar PV projects to be

manufactured in India. That accounts to over 60% of total system costs. For solar thermal,

guidelines mandated 30% project to have domestic content. A rigorous controversy emerged

between power project developers and solar PV equipment manufacturers. The former camp

prefers to source modules by accessing highly competitive global market to attain flexible

pricing, better quality, predictable delivery and use of latest technologies.[9]

The latter camp

prefers controlled / planned environment to force developers to purchase modules from a

small, albeit growing, group of module manufacturers in India.[10]

Manufacturers want to

avoid competition with global players and are lobbying the government to incentivize growth

of local industry.

Guidelines for New Solar Projects Under Jawaharlal Nehru National Solar Mission

released by Dr. Farooq Abdullah and Shri Sushilkumar Shinde

On 25 July 2010, Dr. Farooq Abdullah, Union Minister for New and Renewable Energy and

Shri Sushil Kumar Shinde , Union Minister for Power today jointly unveiled the Guidelinesfor Selection of New Solar Power Projects under the first phase of the Jawaharlal Nehru

National Solar Mission (JNNSM). This would put India in league with countrieslike Germany, Spain and Japan who are leaders in harnessing solar power.

Shri Bharat Singh Solanki, Minister of State for Power, Shri B.K Chaturvedi, Member,

Planning Commission, Shri. Deepak Gupta, Secretary MNRE and Shri. P. Uma Shankar,

Secretary Power were also present at the event.

Dr. Farooq Abdullah stated that he is committed to adding 1100 MW of grid connected solarpower by the end of the first phase of the Mission and this will only be possible if all

activities are carried out with clockwork precision.

The Minister well-versed the gathering that a incredible exhilaration both domestically and

internationally about the National Solar Mission was apparent from the fact that the Small


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Grid Connected Plants Scheme that was recently launched attracted more than 400 MWworth of applications- nearly 4 times the available capacity. He said that he has asked IREDA

to ensure that it should announce the list of eligible projects selected under the scheme latestby August 15, 2010.

Dr. Abdullah expected large retort in the large grid-connected power plants as well and

anticipated that NVVN will now take immediate steps to bring out the expression of interest,invite applications and select eligible developers under the policy released on 25 July 2010.

Shri Shinde mentioned that the guidelines have been finalized after considerable deliberations

in true spirit for the success of the National Solar Mission. He said that rather than working at

cross heads with MNRE, as was normally the case, this time both the ministries have worked

well in tandem for the success of the National Solar Mission. He stated that the

NTPC Vidyut Vyapar Nigam Limited (NVVN), a wholly owned subsidiary of NTPC, is the

nodal agency for entering into PPA with Solar Power Developers and will shortly be inviting

project developers to participate in the Request for Selection (RFS) for development of Solar

Projects under this scheme.

Shri Bharatsinh Solanki mentioned that to achieve the target of 20,000 MW of solar energyby 2022 we need to put in concerted efforts and the indigenous manufacturing of solar power

equipment will be of paramount importance in achieving this goal.

Shri B.K. Chaturvedi, in his address, termed the occasion a reflection of synergy between the

two Ministries to take India ahead in achieving the target set under the Mission. He also

assured all support from Planning Commission.

Shri Uma Shankar reaffirmed the commitment of Ministry of Power to the Mission and spoke

of the efforts being taken to overcome the barriers such as high cost of solar power and

payment security etc.

Shri Deepak Gupta delivered the welcome address.

Under the Jawaharlal Nehru National Solar Mission, NTPC Vidyut Vyapar Nigam (NVVN),

which is the power trading arm of the NTPC has been designated as the

nodal agency to purchase solar power generated by independent solar power producers, at

rates fixed by the Central Electricity Regulatory Commission(CERC) and for a period of 25

years. For 2010 -11 the CERC has fixed the rate of Rs. 17.91 per Unit for PV and Rs 15.31

per unit for solar thermal power projects. The rates will be applicable for Solar PV projects

commissioned by March 2012 and Solar Thermal projects commissioned by March 2013.

Government will provide equivalent MW of power from the unallocated quota of NTPC for

bundling with solar power. NVVN will select projects to set up about 1000MW capacity of

solar power plants based on solar thermal and photovoltaic technologies. The utilities will beable to account for purchase of solar power against their RPO obligations.

On this occasion, NVVN also signed MoU with 16 Project developers to set up to 84 MW

capacity solar power projects. Under Migration 54 MW, capacity will be through solar PV

and balance 30 MW through solar thermal technology .These projects are expected to be

commissioned by middle of next year.


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The Ministry has now released the guidelines concerning all the three major deploymentprogrammes under the Jawaharlal Nehru National Solar Mission to fully operationalise the

deployment related activities

Jawaharlal Nehru National Solar Mission

Towards Building SOLAR INDIA

1. Introduction

The National Solar Mission is a major initiative of the Government of India and State

Governments to promote ecologically sustainable growth while addressing Indias

energy security challenge. It will also constitute a major contribution by India to the

global effort to meet the challenges of climate change.

In launching Indias National Action Plan on Climate Change on June 30, 2008, the

Prime Minister of India, Dr. Manmohan Singh stated:

Our vision is to make Indias economic development energy-efficient. Over a period

of time, we must pioneer a graduated shift from economic activity based on fossil

fuels to one based on non-fossil fuels and from reliance on non-renewable and

depleting sources of energy to renewable sources of energy. In this strategy, the sun

Page 1 of 15

Jawaharlal Nehru National Solar Mission

Towards Building SOLAR INDIA


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1. Introduction

The National Solar Mission is a major initiative of the Government of India and State

Governments to promote ecologically sustainable growth while addressing Indias

energy security challenge. It will also constitute a major contribution by India to the

global effort to meet the challenges of climate change.

In launching Indias National Action Plan on Climate Change on June 30, 2008, the

Prime Minister of India, Dr. Manmohan Singh stated:

Our vision is to make Indias economic development energy-efficient. Over a period

of time, we must pioneer a graduated shift from economic activity based on fossil

fuels to one based on non-fossil fuels and from reliance on non-renewable and

depleting sources of energy to renewable sources of energy. In this strategy, the sun

occupies centre-stage, as it should, being literally the original source of all energy.

We will pool our scientific, technical and managerial talents, with sufficient financial

resources, to develop solar energy as a source of abundant energy to power our

economy and to transform the lives of our people. Our success in this endeavour will

change the face of India. It would also enable India to help change the destinies of

people around the world.

The National Action Plan on Climate Change also points out: India is a tropical

country, where sunshine is available for longer hours per day and in great intensity.

Solar energy, therefore, has great potential as future energy source. It also has the

advantage of permitting the decentralized distribution of energy, thereby empowering

people at the grassroots level.

Based on this vision a National Solar Mission is being launched under the brand

name Solar India.


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2. Importance and relevance of solar energy for India

1. Cost: Solar is currently high on absolute costs compared to other sources of

power such as coal. The objective of the Solar Mission is to create

conditions, through rapid scale-up of capacity and technological innovation to

drive down costs towards grid parity. The Mission anticipates achieving grid

parity by 2022 and parity with coal-based thermal power by 2030, but

recognizes that this cost trajectory will depend upon the scale of global

deployment and technology development and transfer. The cost projections

vary from 22% for every doubling of capacity to a reduction of only 60% with

global deployment increasing 16 times the current level. The Mission Page 2 of 15

recognizes that there are a number of off-grid solar applications particularly

for meeting rural energy needs, which are already cost-effective and provides

for their rapid expansion.

2. Scalability: India is endowed with vast solar energy potential. About 5,000

trillion kWh per year energy is incident over Indias land area with most parts

receiving 4-7 kWh per sq. m per day. Hence both technology routes for

conversion of solar radiation into heat and electricity, namely, solar thermal

and solar photovoltaics, can effectively be harnessed providing huge

scalability for solar in India. Solar also provides the ability to generate power

on a distributed basis and enables rapid capacity addition with short lead

times. Off-grid decentralized and low-temperature applications will be

advantageous from a rural electrification perspective and meeting other

energy needs for power and heating and cooling in both rural and urban


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areas. The constraint on scalability will be the availability of space, since in all

current applications, solar power is space intensive. In addition, without

effective storage, solar power is characterized by a high degree of variability.

In India, this would be particularly true in the monsoon season.

3. Environmental impact: Solar energy is environmentally friendly as it has

zero emissions while generating electricity or heat.

4. Security of source: From an energy security perspective, solar is the most

secure of all sources, since it is abundantly available. Theoretically, a small

fraction of the total incident solar energy (if captured effectively) can meet the

entire countrys power requirements. It is also clear that given the large

proportion of poor and energy un-served population in the country, every

effort needs to be made to exploit the relatively abundant sources of energy

available to the country. While, today, domestic coal based power generation

is the cheapest electricity source, future scenarios suggest that this could well

change. Already, faced with crippling electricity shortages, price of electricity

traded internally, touched Rs 7 per unit for base loads and around Rs 8.50 per

unit during peak periods. The situation will also change, as the country moves

towards imported coal to meet its energy demand. The price of power will

have to factor in the availability of coal in international markets and the cost of

developing import infrastructure. It is also evident that as the cost of

environmental degradation is factored into the mining of coal, as it must, the

price of this raw material will increase. In the situation of energy shortages,

the country is increasing the use of diesel-based electricity, which is both

expensive costs as high as Rs 15 per unit - and polluting. It is in this

situation the solar imperative is both urgent and feasible to enable the country

to meet long-term energy needs.


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3. Objectives and Targets

The objective of the National Solar Mission is to establish India as a global leader in

solar energy, by creating the policy conditions for its diffusion across the country as

quickly as possible. Page 3 of 15

The Mission will adopt a 3-phase approach, spanning the remaining period of the

11th

Plan and first year of the 12th

Plan (up to 2012-13) as Phase 1, the remaining 4

years of the 12th

Plan (2013-17) as Phase 2 and the 13th

Plan (2017-22) as Phase 3.

At the end of each plan, and mid-term during the 12th

and 13th

Plans, there will be an

evaluation of progress, review of capacity and targets for subsequent phases, based

on emerging cost and technology trends, both domestic and global. The aim would

be to protect Government from subsidy exposure in case expected cost reduction

does not materialize or is more rapid than expected.

The immediate aim of the Mission is to focus on setting up an enabling environment

for solar technology penetration in the country both at a centralized and

decentralized level. The first phase (up to 2013) will focus on capturing of the low-

hanging options in solar thermal; on promoting off-grid systems to serve populations

without access to commercial energy and modest capacity addition in grid-based

systems. In the second phase, after taking into account the experience of the initial


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years, capacity will be aggressively ramped up to create conditions for up scaled and

competitive solar energy penetration in the country.

To achieve this, the Mission targets are:

To create an enabling policy framework for the deployment of 20,000 MW

of solar power by 2022.

To ramp up capacity of grid-connected solar power generation to 1000 MW

within three years by 2013; an additional 3000 MW by 2017 through the

mandatory use of the renewable purchase obligation by utilities backed with a

preferential tariff. This capacity can be more than doubled reaching

10,000MW installed power by 2017 or more, based on the enhanced and

enabled international finance and technology transfer. The ambitious target

for 2022 of 20,000 MW or more, will be dependent on the learning of the first

two phases, which if successful, could lead to conditions of grid-competitive

solar power. The transition could be appropriately up scaled, based on

availability of international finance and technology.

To create favourable conditions for solar manufacturing capability, particularly

solar thermal for indigenous production and market leadership.

To promote programmes for off grid applications, reaching 1000 MW by 2017

and 2000 MW by 2022 .

To achieve 15 million sq. meters solar thermal collector area by 2017 and 20

million by 2022.

To deploy 20 million solar lighting systems for rural areas by 2022.

4. Mission strategy (phase 1 and 2)

The first phase will announce the broad policy frame work to achieve the objectives


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of the National Solar Mission by 2022. The policy announcement will create the

necessary environment to attract industry and project developers to invest in

research, domestic manufacturing and development of solar power generation and

thus create the critical mass for a domestic solar industry. The Mission will work

closely with State Governments, Regulators, Power utilities and Local Self Page 4 of 15

Government bodies to ensure that the activities and policy framework being laid out

can be implemented effectively. Since some State Governments have already

announced initiatives on solar, the Mission will draw up a suitable transition

framework to enable an early and aggressive start-up.

A. Utility connected applications: constructing the solar grid

The key driver for promoting solar power would be through a Renewable Purchase

Obligation (RPO) mandated for power utilities, with a specific solar component. This

will drive utility scale power generation, whether solar PV or solar thermal. The Solar

Purchase Obligation will be gradually increased while the tariff fixed for Solar power

purchase will decline over time.

B. The below 80C challenge solar collectors

The Mission in its first two phases will promote solar heating systems, which are

already using proven technology and are commercially viable. The Mission is

setting an ambitious target for ensuring that applications, domestic and industrial,

below 80 C are solarised. The key strategy of the Mission will be to make necessary

policy changes to meet this objective:

Firstly, make solar heaters mandatory, through building byelaws and

incorporation in the National Building Code,


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Secondly, ensure the introduction of effective mechanisms for certification and

rating of manufacturers of solar thermal applications,

Thirdly, facilitate measurement and promotion of these individual devices

through local agencies and power utilities, and

Fourthly, support the upgrading of technologies and manufacturing capacities

through soft loans, to achieve higher efficiencies and further cost reduction.

C. The off-grid opportunity - lighting homes of the power- deprived poor:

A key opportunity for solar power lies in decentralized and off-grid applications. In

remote and far-flung areas where grid penetration is neither feasible nor cost

effective, solar energy applications are cost-effective. They ensure that people with

no access, currently, to light and power, move directly to solar, leap-frogging the

fossil fuel trajectory of growth. The key problem is to find the optimum financial

strategy to pay for the high-end initial costs in these applications through appropriate

Government support .

Currently, market based and even micro-credit based schemes have achieved only

limited penetration in this segment. The Government has promoted the use of

decentralized applications through financial incentives and promotional schemes.

While the Solar Mission has set a target of 1000 MW by 2017, which may appear

small, but its reach will add up to bringing changes in millions of households . The

strategy will be learn from and innovate on existing schemes to improve

effectiveness. The Mission plans to:

Page 5 of 15

Provide solar lighting systems under the ongoing remote village electrification

programme of MNRE to cover about 10,000 villages and hamlets. The use of


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solar lights for lighting purposes would be promoted in settlements without

access to grid electricity and since most of these settlements are remote tribal

settlements, 90% subsidy is provided. The subsidy and the demand so

generated would be leveraged to achieve indigenization as well as lowering of

prices through the scale effect. For other villages which are connected to grid ,

solar lights would be promoted through market mode by enabling banks to

offer low cost credit.

Set up stand alone rural solar power plants in special category States and

remote and difficult areas such as Lakshadweep, Andaman & Nicobar Islands,

Ladakh region of J&K. Border areas would also be included.

Promotion of other off grid solar applications would also be encouraged. This

would include hybrid systems to meet power, heating and cooling energy

requirements currently being met by use of diesel and other fossil fuels. These

devices would still require interventions to bring down costs but the key challenge

would be to provide an enabling framework and support for entrepreneurs to develop

markets.

Solar energy to power computers to assist learning in schools and hostels,

Management Information System (MIS) to assist better management of forests in

MP, powering milk chilling plants in Gujarat, empowering women Self Help Groups

(SHGs) involved in tussar reeling in Jharkhand, cold chain management for Primary

Health Centres (PHCs) are some examples of new areas, being tried successfully in

the country. The Mission would consider up to 30 per cent capital subsidy (which

would progressively decline over time) for promoting such innovative applications of

solar energy and would structure a non-distorting framework to support

entrepreneurship, up-scaling and innovation.


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In order to create a sustained interest within the banking community, it is proposed to

provide a soft re-finance facility through Indian Renewable Energy Development

Agency (IREDA) for which Government will provide budgetary support. IREDA would

in turn provide refinance to NBFCs & banks with the condition that it is on-lend to the

consumer at rates of interest not more than 5 per cent. The Mission would provide

an annual tranche for the purpose which would be used for refinance operations for

a period of ten years at the end of which the funds shall stand transferred to IREDA

as capital and revenue grants for on-lending to future renewable energy projects.

D. Manufacturing capabilities: innovate, expand and disseminate Currently, the

bulk of Indias Solar PV industry is dependent on imports of critical raw materials and

components including silicon wafers. Transforming India into a solar energy hub

would include a leadership role in low-cost, high quality solar manufacturing,

including balance of system components. Proactive implementation of Special

Incentive Package (SIPs) policy, to promote PV manufacturing plants, including

domestic manufacture of silicon material, would be necessary.

Indigenous manufacturing of low temperature solar collectors is already available;

however, manufacturing capacities for advanced solar collectors for low temperature Page 6of 15

and concentrating solar collectors and their components for medium and high

temperature applications need to be built. An incentive package, similar to SIPS,

could be considered for setting up manufacturing plants for solar thermal systems/

devices and components.

The SME sector forms the backbone for manufacture of various components and

systems for solar systems. It would be supported through soft loans for expansion of

facilities, technology upgradation and working capital. IREDA would provide this

support through refinance operations.


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It should be ensured that transfer of technology is built into Government and private

procurement from foreign sources.

E. R&D for Solar India: creating conditions for research and application A

major R&D initiative to focus: firstly, on improvement of efficiencies in existing

materials, devices and applications and on reducing costs of balance of systems,

establishing new applications by addressing issues related to integration and

optimization; secondly, on developing cost-effective storage technologies which

would address both variability and storage constraints, and on targeting space-

intensity through the use of better concentrators, application of nano-technology and

use of better and improved materials. The Mission will be technology neutral,

allowing technological innovation and market conditions to determine technology

winners.

A Solar Research Council will be set up to oversee the strategy, taking into account

ongoing projects, availability of research capabilities and resources and possibilities

of international collaboration.

An ambitious human resource development programme, across the skill-chain, will

be established to support an expanding and large-scale solar energy programme,

both for applied and R&D sectors. In Phase I, at least 1000 young scientists and

engineers would be incentivized to get trained on different solar energy technologies

as a part of the Missions long-term R&D and HRD plan.

Pilot demonstration projects would be closely aligned with the Missions R & D

priorities and designed to promote technology development and cost reduction. The

Mission, therefore, envisages the setting up of the following demonstration projects


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in Phase I, in addition to those already initiated by MNRE and those, which may be

set up by corporate investors:

1. 50-100 MW Solar thermal plant with 4-6 hours storage (which can

meet both morning and evening peak loads and double plant load

factor up to 40%).

2. A 100-MW capacity parabolic trough technology based solar thermal

plant.

3. A 100-150 MW Solar hybrid plant with coal, gas or bio-mass to address

variability and space-constraints.

Page 7 of 15

4. 20-50 MW solar plants with/without storage, based on central receiver

technology with molten salt/steam as the working fluid and other

emerging technologies.

5. Grid-connected rooftops PV systems on selected government buildings

and installations, with net metering.

6. Solar-based space-cooling and refrigeration systems to meet daytime

and summer season peak load. These could be installed on selected

government buildings and installations.

The configurations and capacities as mentioned above are indicative and would be

firmed up after consultations with various stakeholders.Bidding process will be

adopted to set up solar power demonstration plants which would help in better price

discovery for determining tariff for solar power. It will be ensured that indigenous


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content is maximized. The bid documents will also include a technology transfer

clause. It is expected that these plants will be commissioned in the 12th

plan period.

5. Proposed Roadmap

The aspiration is to ensure large-scale deployment of solar generated power for grid-

connected as well as distributed and decentralized off-grid provision of commercial

energy services. The deployment across the application segments is envisaged as

follows:

S.

No.

Application segment Target for

Phase I (2010-

13)

Target for

Phase 2

(2013-17)

Target for

Phase 3

(2017-22)

1. Solar collectors 7 million sq

meters

15 million sq

meters

20 million sq


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meters

2. Off grid solar

applications

200 MW 1000 MW 2000 MW

3. Utility grid power,

including roof top

1,000-2000

MW

4000-10,000

MW

20000 MW

6. Policy and regulatory framework

The objective of the Mission is to create a policy and regulatory environment which

provides a predictable incentive structure that enables rapid and large-scale capital

investment in solar energy applications and encourages technical innovation and

lowering of costs.

Although in the long run, the Mission would seek to establish a sector-specific legal

and regulatory framework for the development of solar power, in the shorter time

frame, it would be necessary to embed the activities of the Mission within the existing Page 8of 15

framework of the Electricity Act 2003. The Electricity Act already provides a role for

renewables but given the magnitude and importance of the activities under the

Mission, it would be necessary to make specific amendments. The National Tariff

Policy 2006 mandates the State Electricity Regulatory Commissions (SERC) to fix a

minimum percentage of energy purchase from renewable sources of energy taking


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into account availability of such resources in the region and its impact on retail tariff.

National Tariff Policy, 2006 would be modified to mandate that the State electricity

regulators fix a percentage for purchase of solar power. The solar power purchase

obligation for States may start with 0.25% in the phase I and to go up to 3% by 2022.

This could be complemented with a solar specific Renewable Energy Certificate

(REC) mechanism to allow utilities and solar power generation companies to buy

and sell certificates to meet their solar power purchase obligations.

The Central Electricity Regulatory Commission has recently issued guidelines for

fixing feed-in-tariff for purchase of Solar power taking into account current cost and

technology trends. These will be revised on an annual basis. The CERC has also

stipulated that Power Purchase Agreement that utilities will conclude with Solar

power promoters, should be for a period of 25 years.

In order to enable the early launch of Solar India and encourage rapid scale up, a

scheme is being introduced in cooperation with the Ministry of Power, the NTPC and

the Central Electricity Authority, which would simplify the off-take of solar power and

minimize the financial burden on Government.

Many investors are willing to set up solar based power plants. However, sale of

power by the IPPs may be an issue due to the high cost of power and realization of

tariff for the same from the distribution companies.

In order to incentivise setting up of a large number of Solar Power Projects, while

minimizing the impact on tariff various alternatives were explored. One of the

options is to bundle solar power along with power out of the cheaper unallocated

quota of Central stations and selling this bundled power to state distribution utilities

at the CERC regulated price. This will bring down the gap between average cost of

power and sale price of power. For the purpose of bundling, power has to be


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purchased by an entity and re-sold to the state power distribution utilities. Such

function can be done only by a trading company/Discoms, as per the existing

statutory provisions.

NTPC has a wholly owned subsidiary company engaged in the business of trading of

Power NTPC Vidyut Vyapar Nigam Ltd. (NVVN). NVVN will be designated as

nodal agency by the Ministry of Power (MoP) for entering into a Power Purchase

Agreement (PPA) with Solar Power Developers to purchase solar power fed to 33

KV and above grid, in accordance with the tariff and PPA duration as fixed by the

Central Electricity Regulatory Commission. The Ministry of Power shall allocate to

NVVN, equivalent megawatt capacity, from the Central unallocated quota, from

NTPC power stations, at the rate notified by the CERC for bundling together with

solar power. NVVN will undertake the sale of the bundled power to State utilities at

the rates determined as per CERC regulations. The above arrangement would be

subject to review by Government, in case of, significant price movement in the

market. The above arrangement will be limited to utility scale solar power generated Page 9

of 15

from a maximum anticipated capacity of 1000 MW in the first phase. When NVVN

supplies bundled power to State utilities at the rates determined as per CERC

regulations, those State utilities will be entitled to use the solar part of the

bundled power for meeting their Renewable Purchase Obligations (RPO)

under the Electricity Act, 2003.The CERC may issue appropriate guidelines in this

regard. At the end of the first phase, well-performing utilities with proven financial

credentials and demonstrated willingness to absorb solar power shall be included in

the Scheme, in case it is decided to extend it into Phase II.

The requirement of phased indigenization would be specified while seeking

development of solar power projects under this scheme. The size of each project

would to determined so as to make phased indigenization feasible. The tariff and tax


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regime for key components and segments would be suitably fine tuned so as to

promote the process of indigenization.

The Mission will encourage rooftop solar PV and other small solar power plants,

connected to LT/11 KV grid, to replace conventional power and diesel-based

generators. It is envisaged that distribution utility will pay the tariff determined by the

State Electricity Regulatory Commission for the metered electricity generated from

such applications (whether consumed by the grid connected owner of the

rooftop/ground mounted installation or fed into the grid). Under the Solar Mission, a

normative Generation Based Incentive will be payable to the utility and would be

derived as the difference between the solar tariff determined by the Central

Electricity Regulatory Commission for the concerned solar generation technology

less an assumed base price of Rs. 5.50/kWh with 3% annual escalation. Funds will

be disbursed through Indian Renewable Energy Development Agency (IREDA), a

PSU under MNRE. The distribution utilities will be entitled to account such electricity

generated and consumed within their license areas for fulfillment of RPOs.The

metering and billing arrangements between the utility and the rooftop PV operator,

will be as per guidelines/regulations of the appropriate commission

State Governments would also be encouraged to promote and establish solar

generation Parks with dedicated infrastructure for setting up utility scale plants to

ensure ease of capacity creation.

Fiscal incentives

It is also recommended that custom duties and excise duties concessions/

exemptions be made available on specific capital equipment, critical materials ,

components and project imports.


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Solar Manufacturing in India

One of the Mission objectives is to take a global leadership role in solar

manufacturing (across the value chain) of leading edge solar technologies and target

a 4-5 GW equivalent of installed capacity by 2020, including setting up of dedicated

manufacturing capacities for poly silicon material to annually make about 2 GW

capacity of solar cells. India already has PV module manufacturing capacity of about Page 10

of 15

700 MW, which is expected to increase in the next few years. The present

indigenous capacity to manufacture silicon material is very low, however, some

plants are likely to be set up soon in public and private sector. Currently, there is no

indigenous capacity/capability for solar thermal power projects; therefore new

facilities will be required to manufacture concentrator collectors, receivers and other

components to meet the demand for solar thermal power plants.

To achieve the installed capacity target, the Mission recommends the following:

Local demand creation: The 20 GW plan supported with right level of

incentives for solar generation coupled with large government

pilot/demonstration programs will make the Indian market attractive for solar

manufacturers

Financing & Incentives: SEZ like incentives to be provided to the

manufacturing parks which may include:

o Zero import duty on capital equipment, raw materials and excise duty

exemption

o Low interest rate loans, priority sector lending

o Incentives under Special Incentive Package (SIPs) policy to set up

integrated manufacturing plants; (i) from poly silicon material to solar


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modules; and (ii) thin film based module manufacturing plants. . Under

the SIP scheme of the Department of Information Technology, there

are 15 applications in the domain of solar photovoltaic, which includes

cell manufacturing, (both crystalline and thin film) and poly-silicon

manufacturing among others. The combined capacity projected by

these 15 companies could result in the production of 8-10 GW solar

power by the year 2022 which would be sufficient for meeting the

Mission targets even after accounting for exports.

o It is also recommended that solar components be covered under the

Bureau of Energy Efficiencys star rating programme to ensure high

standards.

Similar incentives will be required for manufacture of CSP systems and their

components. A Committee may be set up to formulate a policy for promotion of solar

thermal manufacture in the country.

Ease of doing business: In consultation with States, create a single window

clearance mechanism for all related permissions.

Infrastructure & ecosystem enablers: Create 2-3 large solar manufacturing

tech parks consisting of manufacturing units (across the solar value chain),

housing, offices, and research institutes. These will have 24x7 power and

water supply and will likely need to be located near large urban centres with

good linkages to ports and airports to ensure rapid access to imported raw

materials and high quality engineering talent.

Page 11 of 15


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7. Research and Development

This Mission will launch a major R&D programme in Solar Energy, which will focus

on improving efficiency in existing applications, reducing costs of Balance of

Systems, testing hybrid co-generation and addressing constraints of variability,

space-intensity and lack of convenient and cost-effective storage.

The R&D strategy would comprise dealing with five categories viz. i) Basic research

having long term perspective for the development of innovative and new materials,

processes and applications, ii) Applied research aimed at improvement of the

existing processes, materials and the technology for enhanced performance,

durability and cost competitiveness of the systems/ devices, iii) Technology

validation and demonstration projects aimed at field evaluation of different

configurations including hybrids with conventional power systems for obtaining

feedback on the performance, operability and costs, iv) development of R&D

infrastructure in PPP mode, and v) support for incubation and start ups.

To support the R&D Strategy, the Mission may include the following:

- Setting up a high level Research Council comprising eminent scientists,

technical experts and representatives from academic and research

institutions, industry, Government and Civil Society to guide the overall

technology development strategy. The Council may invite eminent

international experts in the field to support its work. The Council will review

and update the technology roadmap to achieve more rapid technological

innovation and cost reduction.

- A National Centre of Excellence (NCE) shall be established to implement the

technology development plan formulated by the Research Council and serve


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as its Secretariat. It will coordinate the work of various R&D centres, validate

research outcomes and serve as an apex centre for testing and certification

and for developing standards and specifications for the Solar industry. It is

envisaged that the Solar Energy Centre of the MNRE will become part of the

National Centre of Excellence.

- The Research Council, in coordination with the National Centre of Excellence,

inventorize existing institutional capabilities for Solar R&D and encourage the

setting up of a network of Centres of Excellence, each focusing on an R&D

area of its proven competence and capability. These Centres may be located

in research institutes, academic institutions or even private sector companies.

They will be encouraged to bid for various components of the Solar

Technology Development Plan, and may do so adopting a consortium

approach, collaborating with other institutions, including foreign collaboration,

with proven capabilities.

Page 12 of 15

- The NCE will provide a national platform for networking among different

centers of excellence and research institutions, including foreign R&D

institutions and high-tech companies.

- The NCE will serve as the funding agency to support performance-linked solar

R&D programmes. This will include funding, or co-funding of pilot

demonstration projects in areas relevant to Mission objectives. Funding will

need to be adequate, predictable and should typically cover a time frame

extending from 5-10 years.

- The NCE will be the main interface with international research institutions,

research groups from foreign countries, high-tech start-up companies and


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multilateral programmes (such as those which may emerge from current

negotiations under the UNFCCC). It will encourage joint projects between

international partners and Indian centres of excellence, with sharing of IPR, as

also encourage the setting up of R&D bases in India by advanced high-tech

companies from abroad.

- The NCE will coordinate with the IMD, ISRO and other concerned agencies,

the detailed mapping of ground insulation, particularly in high potential solar

regions of the country. Accurate and reliable data is a critical requirement for

all solar applications, in particular, concentrated solar power (CSP).

- In drawing up the Solar Technology Development Plan, the Research Council

will review ongoing and proposed R&D initiatives of MNRE, the Department of

Science and Technology, the Ministry of Earth Sciences and other agencies

and institutions and incorporate them, as appropriate, in its Plan.

In order to provide support for incubation and start ups, the Mission could tie up with

institutions like Centre for Innovation, Incubation and Entrepreneurship (CIIE) based

in IIM Ahmedabad to incubate solar energy start-ups and SMEs in India through

mentoring, networking and financial support. A fund could be established to aim at

supporting at least 50 start-ups developing and deploying solar related technologies

across India over the next 5 years and would be managed by a professional entity.

The Fund shall be structured as a Venture Fund and would be operated as a hub

and spoke model with the professional entity coordinating the fund activities and also

identifying like minded institutions for administering the fund. The Fund would

provide financial (equity/debt) support to start-ups, entrepreneurs and innovators for

R&D and pilot of new solar related technologies and for creating new and unique

business models which have a potential of increasing the deployment of solar related

technologies in India for all segments including consumer, SME and commercial


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usage. The initiative shall be structured ideally in a private-public partnership model,

to be able to provide risky capital to the aspiring entrepreneurs. It would also attract

contributions from private stakeholders, amounting to, at least 10% of that of the

Government. The returns generated on the Government support to the Fund shall be

ploughed back for further promoting incubation activities in this space.

Page 13 of 15

The Mission would also explore the possibility of collaborating with CSIR to launch

an Open Source Solar Development initiative on similar lines as the Open Source

Drug Discovery platform of CSIR

8. Human Resource Development

The rapid and large-scale diffusion of Solar Energy will require a concomitant

increase in technically qualified manpower of international standard. Some capacity

already exists in the country, though precise numbers need to be established.

However, it is envisaged that at the end of Mission period, Solar industry will employ

at least 100,000 trained and specialized personnel across the skill spectrum. These

will include engineering management and R&D functions.

The following steps may be required for Human Resource Development:

o IITs and premier Engineering Colleges will be involved to design and develop

specialized courses in Solar Energy, with financial assistance from

Government. These courses will be at B. Tech, M. Tech and Ph. D level.

Some of the IITs, Engineering Colleges and Universities are teaching solar

energy at graduation and post graduation level. Centres for Energy studies

have been set up by some of the IITs and engineering colleges. These

initiatives will be further strengthened. In addition, a countrywide training


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programme and specialized courses for technicians will be taken up to meet

the requirement of skilled manpower for field installations and after sales

service network. The Directorate General of Education and Training under

the Ministry of Labour has agreed to introduce training modules for course

materials for technicians in order to create a skilled workforce which could

service and maintain solar applications. MNRE has already initiated this

activity with the Ministry of Labour and a short term training module is to be

introduced during the current academic session. In addition, industry is also

working with some of the ITIs to create a skilled work force.

o A Government Fellowship programme to train 100 selected engineers /

technologies and scientists in Solar Energy in world class institutions abroad

will be taken up. This may need to be sustained at progressively declining

levels for 10 years. This could be covered under the ongoing bilateral

programmes. Institution to institution arrangements will also be developed.

Fellowships will be at two levels (i) research and (ii) higher degree (M. Tech)

in solar energy. MNRE is already implementing a fellowship programme in

this regard, which will be expanded to include students from a larger number

of academic institutions. This may be done in consultation with industry to

offer employment opportunities.

o Setting up of a National Centre for Photovoltaic Research and Education at

IIT, Mumbai drawing upon its Department of Energy Science and Engineering

and its Centre for Excellence in Nano-Electronics.

Page 14 of 15

9. Institutional Arrangements for implementing the Mission


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This Mission will be implemented by an autonomous Solar Energy Authority and or

an autonomous and enabled Solar Mission, embedded within the existing structure

of the Ministry of New and Renewable Energy. The Authority/Mission secretariat will

be responsible for monitoring technology developments, review and adjust

incentives, manage funding requirements and execute pilot projects. The Mission will

report to the Prime Ministers Council on Climate Change on the status of its

programme.

The broad contours of an autonomous and enabled Mission would comprise of:

i) A Mission Steering Group, chaired by the Minister for New and Renewable

Energy and composed of representatives from all relevant Ministries and

other stakeholders, will be set up to over see the over all implementation of

the National Solar Mission. The Mission Steering Group will be fully

empowered to approve various schemes/ projects/ policies and the related

financial norms for all schemes covered under the National Solar Mission

(NSM). The Mission Steering group will also authorize any

modifications/deviations in the norms on ongoing schemes.

ii) A Mission Executive Committee, chaired by Secretary, Ministry of New and

Renewable Energy, will periodically review the progress of implementation of

the projects approved by the Mission Steering Group.

iii) An empowered Solar Research Council headed by an eminent scientist will

advise the Mission on all R&D, technology and capacity building related

matters. In addition, Industry Advisory Council will advise the Mission on all

matters relating to industrial development, technology

transfer/absorption/joint ventures, incentives and investment related matters.

iv) A Mission Director, with the rank of an Additional Secretary, would head the

Mission secretariat and be responsible for day to day functioning and also


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achieving the goals laid out in a time bound manner. The Mission Secretariat

would have Joint secretary/ Scientist G level officers including other

scientists, experts and consultants.

10. International Collaboration

There is considerable work going on in several countries to develop Solar Energy as

a clean and alternative source of energy. Strategic international collaborations and

partnerships aimed at meeting the priorities set out under the Mission would be

developed, along with effective technology transfer mechanisms and strong IPR

protection.

Cooperation will be encouraged at the level of research organizations along with

industry partners and at individual level also to generate new ideas. Wherever

feasible, cooperation through bilateral and multilateral arrangements would be

facilitated. DST has been supporting joint research with several countries under

bilateral programmes. More recently a research programme is to be taken up by

DST, in consultation with MNRE, with the European Union. MNRE is also

implementing some bilateral projects under the Asia Pacific Partnership Programme Page 15of 15

with Japan and Australia. A project on solar radiation data collection is under

implementation with USA.

11. Financing the Mission activities

The fund requirements for the Mission would be met from the following sources or

combinations:


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i) Budgetary support for the activities under the National Solar Mission

established under the MNRE;

ii) International Funds under the UNFCCC framework, which would enable

upscaling of Mission targets.

The Mission strategy has kept in mind the two-fold objectives, to scale-up

deployment of solar energy and to do this keeping in mind the financial constraints

and affordability challenge in a country where large numbers of people still have no

access to basic power and are poor and unable to pay for high cost solutions.

The funding requirements and arrangements for Phase II will be determined after a

review of progress achieved at the end of the 11th

Plan and an analysis of the

efficacy of the model adopted for capacity building of utility scale solar power.

Section 86. (Functions of State Commission): --- (1) The State Commission

shall discharge the following functions, namely: -

(a) determine the tariff for generation, supply, transmission and

wheeling of electricity, wholesale, bulk or retail, as the case may

be, within the State:

Provided that where open access has been permitted to a

category of consumers under section 42, the State Commission

shall determine only the wheeling charges and surcharge thereon,

if any, for the said category of consumers;


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(b) regulate electricity purchase and procurement process of

distribution licensees including the price at which electricity shall

be procured from the generating companies or licensees or from

other sources through agreements for purchase of power for

distribution and supply within the State;

(c) facilitate intra-State transmission and wheeling of electricity;

(d) issue licences to persons seeking to act as transmission licensees,

distribution licensees and electricity traders with respect to their

operations within the State;

(e) promote co-generation and generation of electricity from

renewable sources of energy by providing suitable measures for

connectivity with the grid and sale of electricity to any person,

and also specify, for purchase of electricity from such sources, a

percentage of the total consumption of electricity in the area of a

distribution licensee;

(f) adjudicate upon the disputes between the licensees, and

generating companies and to refer any dispute for arbitration;

(g) levy fee for the purposes of this Act;

(h) specify State Grid Code consistent with the Grid Code specified

under clause (h) of sub-section (1) of section 79;

(i) specify or enforce standards with respect to quality, continuity

and reliability of service by licensees;


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(j) fix the trading margin in the intra-State trading of electricity, if

considered, necessary; and

(k) discharge such other functions as may be assigned to it under this

Act.

(2) The State Commission shall advise the State Government on all or any of

the following matters, namely :-.

(i) promotion of competition, efficiency and economy in activities of

the electricity industry;

(ii) promotion of investment in electricity industry;

(iii) reorganization and restructuring of electricity industry in the

State;

(iv) matters concerning generation, transmission , distribution and

trading of electricity or any other matter referred to the State

Commission by that Government.

(3) The State Commission shall ensure transparency while exercising its

powers and discharging its functions.

(4) In discharge of its functions, the State Commission shall be guided by the

National Electricity Policy, National Electricity Plan and tariff policy published

under section 3.

the jawaharlal nehru national solar mission q

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