Draft guidelines issued by MNRE for off-grid solar power plants scheme

The Ministry of New and Renewable Energy (MNRE) hasissued draft guidelines for implementation of off-grid solar power plants under the renewable energy service company (RESCO) model. In April 2020, the ministry had extended the off-grid solar power plants and decentralised solar photovoltaic (PV) applications programme phase-III scheme till 31st March, 2021. It said that under the extended scheme, off-grid solar power packs would be installed only under RESCO.

“The scheme will be applicable only for north-eastern states with Central Financial Assistance (CFA) of 90 percent of the benchmark cost of the system,” the ministry said in a statement. This CFA provided would reduce the financial burden to a significant level, which otherwise is very high in per unit terms due to smaller size of plants and investment in storage batteries.

According to the guidelines, off-grid solar power plants of individual size up to 25 kilowatt (kW) can be installed in areas where grid power has either not reached or is unreliable. Such plants are mainly aimed at providing electricity to government schools, hostels, panchayats, police stations, and other public service institutions. The guidelines stated that under the RESCO model, the vendor would install and operate the solar power plant of capacity up to 10 kW for at least 10 years and solar PV plants of capacity above 10 kW for at least 15 years. Solar power plants would be installed by the RESCO on a build, own, operate, transfer basis.

However, tariff estimation has been done for two cases. First, in which the subsidy is paid upfront, the levelised tariff discovered is `5.96 per kWh. Second, in which 50 percent subsidy is paid upfront and the balance after completion of five years, the levelised tariff is `9.55 per kWh.