Low offer price deters entrepreneurs to invest in solar power

By SNV Sudhir

Visakhapatnam, June 2, 2014: Despite both the UPA and NDA governments thrust on renewable energy there seem to be not many takers to the state government’s solar power policy.

The earlier state government, announced a solar power policy and invited applications to set up solar power plants to produce around 1000 mw power, but there were very few who responded to the government’s offer of Rs 6.49 per unit.

The state government also announced various incentives that will be in force for a period of seven years from the date of implementation of the projects.  According to the policy,  there will be no wheeling and transmission charges from the projects to the desired locations for captive use or sale to a third party within the state, all solar projects will be exempted from electricity duty for captive consumption and third-party sale.

VAT for inputs required for the projects will be refunded by commercial taxes department. The industries department will provide incentive in terms of refund of stamp duty and registration charges for land purchased for setting up of the solar power plant projects.

 Last September, AP Transco had invited bids to set up these power plants at 109 substations across the state, including Telangana region. But the government agency had received applications only for 47 locations.

Of the 5 districts under APEPDCL having headquarters at Vizag, only two applications were received for captive power plants, not to supply power to discom.  Prospective entrepreneurs are of the opinion that the government’s offer of Rs 6.49 per unit is too less and not viable to set up a Plant and sell the power to the discom.

Low offer price and also the reported inordinate delay  in processing the applications by the NEDCAP for various input subsidies announced by the union government are said to be the main reasons behind the lukewarm response to the solar power policy.

Under each sub station, there are more than 25 injection centres. The two solar captive power plants that have come up under EPDCL limits was one  in Srikakulam by Trimax group and another in Vizag at Visakha Dairy for their internal usage.

Applications were sought for 12 sub stations in the five districts. “AP Transco had also extended the deadline to receive applications twice earlier. But there was no much response. I think the new government may announce a fresh solar power policy,” said a senior official of EPDCL.

The price fixed per unit by the AP Transco can’t be reviewed for the next 20 years. According to some experts Andhra Pradesh is one of the most suitable locations in the country for installing solar power plants as, on an average, state registers about 300 sunny days in a year.

“Rs 6.49 per unit is not at all viable and its one of the main reasons why though many are interested in setting up solar power plants are not coming forward. The new government should see to that the price per unit is fixed at minimum Rs 10 then many would come forward. Solar power is the best green energy without any harmful emissions. We are eagerly waiting for the new government to sworn in and announce its new policy,” said a prospective entrepreneur, who wished not to be identified.