Power Finance Corp and Rural Electrification Corp to fund solar power projects - Government unveils guidelines for grid-connected projects

Power Finance Corporation (PFC) and Rural Electrification Corporation (REC) will finance some of the solar power projects in the country, the Union Power Minister, Mr Sushilkumar Shinde, said here on Sunday.

India is looking to generate 1,000 MW of solar power by 2013 under the Jawaharlal Nehru National Solar Mission (JNNSM). About 500 MW of the expected solar power would come through thermal power and another 500 MW from photovoltaic cells in the next three years, Mr Shinde said at a press conferencehere on Sunday.

Besides PFC and REC, the Indian Renewable Energy Development Agency (IREDA) will also fund these projects, the Power Minister said. The country currently produces less than 5 MW of solar power every year.Mr Shinde and Dr Farooq Abdullah, New and Renewable Energy Minister, jointly released the guidelines for the selection of new grid-connected solar power projects.

The guidelines stipulate that the projects should be of 5 MW or more in case they use solar photovoltaic cells to connect to the transmission company's sub-stations.To ensure wider participation from solar power developers, only one application per company — including its parent, affiliate or group company — would be permitted for development of a single project.

Nodal agency

NTPC Vidyut Vyapar Nigam (NVVN) is the nodal agency for sale and purchase of power under the solar mission. It will invite expressions of interest from developers for solar photovoltaic projects under this scheme.Meanwhile, industry has welcomed the guidelines released by the Government. “The guidelines for selection of new grid-connected solar power projects are timely and topical, and are bound to give a strong impetus to the solar industry both in terms of marketing and manufacturing to achieve the National Solar Mission target. The stipulation on made-in-India content vindicates the criticality of Indian solar manufacturing sector,” Mr Deepak Puri, Chairman and Managing Director, Moser Baer India Ltd, said.

The guidelines are likely to pave the way for quick start of the JNNSM. Under the mission, , the Government has set a target of generating 20,000 MW by tapping solar energy. The target would be implemented in three phases — phase I up to 2012-13, phase II from 2013-17 and phase III from 2017-22.

At CERC ratesNTPC Vidyut Vyapar will purchase solar power generated by independent 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 Rs 17.91 a unit for photovoltaic (PV) and Rs 15.31 a 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.On Sunday NVVN also signed a memorandum of understanding with 16 project developers to set up to 84 MW capacity solar power projects. These are migration 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 the middle of next year.