FCC

Union Ministry Extends Scheme for Solar Parks, Mega Projects until FY26

2023-06-23

The scheme for 'Development of Solar Parks and Ultra Mega Solar Park Projects' has been extended by the union ministry of new and renewable energy until FY26. According to a notification from the ministry, this extension will not result in any additional financial implications. The original schedule had set the scheme to end in March 2024.

Introduced in December 2014, the scheme aims to assist states and union territories in establishing solar parks across the country, providing the necessary infrastructure for solar power projects. A solar park is a large area of land developed with shared infrastructure facilities such as transmission infrastructure, roads, water, drainage, and communication networks, along with all the required statutory clearances.

Under this scheme, the ministry offers central financial assistance (CFA) of up to Rs 25 lakh per solar park for the preparation of a detailed project report (DPR). Additionally, CFA of up to Rs 20 lakh per MW or 30 per cent of the project cost, including grid-connectivity expenses, whichever is lower, is provided upon achieving the milestones outlined in the scheme.

The decision to extend the scheme comes in light of the slow progress observed in the development of solar parks. In a response to a question in the Lok Sabha in March, RK Singh, the union minister for new and renewable energy (MNRE), revealed that out of the 57 solar parks with a total capacity of 39.28 GW, only nine were fully completed, and another eight were partially completed as of February 2023.

Singh attributed the delay in establishing solar parks to various factors, including challenges related to acquiring suitable land, discrepancies in timelines between solar projects and power evacuation infrastructure, environmental concerns such as the Great Indian Bustard (GIB) issue, and regulatory obstacles like the non-approval of solar tariffs by State Electricity Regulatory Commissions (SERCs).