Sep-28,2012

The Andhra Pradesh government has announced its solar policy. Tax benefits are on the table for projects, as well as exemptions from power transmission fees. The Andhra Pradesh Solar Power Policy will remain in place until 2017.

Madhavan Nampoothiri, Founder and Director of RESolve Energy Consultants told pv magazine that the new policy is not driven by FITs, but rather focuses on Renewable Purchase Obligation (RPO) regulations, and Renewable Energy certificates (REC). As such, the success of the policy depends upon the enforcement of the RPO in a lot of states in India.


There has also been no specifications on domestic content or goals to be achieved in India's fourth largest state. PV plants developed by June 2014 will be able to claim incentives for seven years. "Since the AP policy does not have any Domestic Content Requirement (DCR), there are no barriers for foreign solar companies to sell their products or even set up power projects. Overall, I would say that there is a level playing field for foreign companies," Nampoothiri added.


The state has announced that there will be "no wheeling and transmission charges for the wheeling of power generated from solar power projects to the desired location/s for captive use/third party sale within the state through 33kV systems". If the energy is thus sold within Andhra Pradesh such charges will be exempted.


Cross subsidy charges will not be applied and solar projects will also be exempt from paying electricity duty for captive consumption and third party sale within the state. VAT refunds will further be provided by the Commercial Tax department. For sales outside the state, charges apply as determined by the state's regulatory commission.


Permits for grid connection are also to be issued within 21 days, and there is a restriction on the use of fossil fuels in the solar plant. Nampoothiri added, "The policy says that 'technical feasibility for evacuation will be granted within 21 days'. It is unclear whether they are saying that they will grant the permit within 21 days or decide whether a permit can be given within 21 days. If it is the latter, then the timeframe is realistic, but not so if it is about granting the permit."


Only the abstract of the policy is available thus far and further details are awaited.