1. Incentives For Use Of Renewables
Design of Renewable Energy Systems
Incentives For Use Of Renewables
Presented by,
Adinath Jain
Assistant Professor
Dept. of EEE
RVCE, Bangalore

2. Government incentives for use of renewables
Foreign Direct Investments (FDI)
India permits up to 100% FDI in renewable energy sector for projects that are subject to the provisions of Electricity Act of 2003.
Under the act, no prior approval of regulatory authority is required for infusion of foreign investment, the only exception being if the investment is made in a limited liability partnership (LLP).
Tax holiday under domestic income tax law
Undertakings engaged in the generation or generation & distribution of renewable power have been offered a 10-year tax holiday if power generation has begun before 31 March 2017.
However, the plants have to pay a minimum alternate tax based on income), which can be offset over the next 10 years.
Financing
The Indian Renewable Energy Development Agency (IREDA) has been established under the MNRE as a specialized financing agency to promote & finance renewable energy projects.
Tax & Fiscal Incentives
The central government has offered exemption from customs and excise duties on specific goods required for setting up renewable energy projects, provided the prescribed conditions are satisfied.
Some state governments have provided incentives in the form of VAT at 5% instead of the actual 15%.

3. Government incentives for use of renewables
Generation-based incentives
Under this scheme of the MNRE, wind power projects (which are not availing the Accelerated Depreciation benefit) are eligible for an incentive of Rs per unit of power fed to the grid for a minimum period of 4 years and a maximum period of 10 years subject to a ceiling of Rs. 10 million per MW.
This incentive can be claimed by wind projects commissioned on or after 1 April 2012, through IREDA, and is over and above the tariff approved by the State Electricity Regulatory Commissions (SERCs).
Accelerated Depreciation (AD)
Under the domestic income tax law, companies involved in renewable energy are provided with accelerated depreciation at 80% on a written down value (WDV) basis. However, windmills installed on or after 1-April but before 1-April-2014, would be eligible fore depreciation at the rate of 15% on WDV basis.
Renewable Purchase Obligation
The SERCs are required to set a fixed RPO for distribution companies to enable the purchase of 2-14% of their total power requirement from renewable energy resources.
National Solar Mission
The Jawaharlal Nehru National Solar Mission (JNNSM) was established to promote production of solar energy.
As part of this, the Solar Energy Corporation of India (SECI) auctioned 750MW of solar projects divided into open and domestic projects.
This promoted strong interest with bids from 58 developers totalling 2170MW, much higher than the original offer.

4. Summary of incentives for renewables
Financial Incentives for Solar
Preferential tariffs at both state and central levels
Capital subsidy for off-grid projects, process heating, solar heating
Soft loans for off-grid PV projects and solar heating
Financial Incentives for Wind
Income tax holiday u/s 801A
Excise duty relief
Concessional customs duty
Preferential tariffs by SERCs
35% for first year

5. Solar water heating system 13000-20000 6000-6600 2 Solar Cooker
Sl. No.
Product
Cost Range (Rs.)
MNRE Subsidy (Rs.) 1
Solar water heating system 2
Solar Cooker
Box type
Dish type
Scheffles type
30%-60% 3
Solar home lighting 4
Solar street lighting 5
Solar lanterns 6
Solar pumps
per kW 7
Family-type biogas plant 8
Small wind turbines (off-grid)
per kW
Up to per kW 9
Water mills
70000 to 80000
35000