Himachal Pradesh Solar Power Policy-2016 :

1. Aims and Objectives :

(i) Promote generation of electricity from solar energy for energy security for sustainable development, which is the core Development Policy of the State. (ii) Contribute to the National objective of increasing the share of Renewable Energy in total energy consumption, in accordance with climate, environment and macro economic considerations. (iii) Strengthen and sustain the Policy of 100% clean electricity consumption in the State, by providing a suitable alternative to coal and gas based power and to provide firm base load power during the sunshine time of the day , so that water in the hydro projects are impounded during day time for peaking power. (iv) Empower people in the remote and rural areas with 24x7 powers by way of decentralised solar power supply, especially in the unreliable grid systems in the mountains, to meet their basic needs, enable access to social and commercial services, and technologies (v) Contribute to macro policies and strategies on climate change, environment protection and sustainable development. (vi) Promote investment, mainly private, so as to derive benefits of jobs, incomes, revenues and growth. (vii) Facilitate achieving RPPO ( Renewable Power Purchase Obligation ) by capacity creations in the State. (viii) Create awareness about potentials of renewable energy, especially solar, as a source of reliable, affordable and accessible energy in a decentralised manner, so that efficient use of electricity becomes a way of life, eventually even for cooking needs and transportation needs to power automobiles.

2. Need for Solar Policy Revision : The State Govt. had formulated its Solar Power Policy, which was notified on March 4, 2014. The Govt. of India has up scaled the capacity target from 20,000 MW to 1,00,000 MW (100 GW) to be achieved by 2022, of which 40 GW is planned through roof top mode. While there is sufficient generation of RE through SHPs, it is desirable to align State’s target also with the national target. This is a great challenge. Private initiative, which is the prime mover, has not been encouraging so far. The HPSEBL can achieve its RPPO by purchasing power from outside the State and also by purchasing Renewable Energy Certificates (REC). The objective of energy security and sustainability can be achieved only if the abundant potential available in the State is harnessed in the State itself. This will add efficiency, quality and equitable access in the electricity supply system. The benefits of investments like jobs, incomes, revenue etc. will also be available. To achieve these objectives and to achieve in time, there is a need to create an investment climate where doing gassiness in the State is easy and the investment is safe and profitable. In view of this, policy revision is required, wherein investment in solar projects are treated like industrial project investments; where the Govt. becomes partner in development by facilitating statutory clearances and committing administrative supports and consents in a time bound manner. The Govt. of Himachal, therefore, considers it prudent to revise its Solar Power Policy of March 4, 2014 and accordingly decides to issue the revised Solar Power Policy.

3. Nodal Agency:

For the purpose of Registration of Projects, Co-ordination, Facilitation, administration of Centre and State Govt. incentives if any, grant of consent/approvals etc;. HIMURJA under the Department of NES, GoHP, will be the State Level Nodal Agency.

4. Strategic Approach :

 Development of solar power projects is different from development of other renewable sources like small hydro, biomass, municipal waste etc. First, it does not have any environmental impact. It is not site specific resource and therefore can be set up on waste land, devoid of forests and having no other efficient alternative use. Solar PV panels are mounted and do not involve substantial breaking of land and slopes. Secondly, in case of hydel projects, a specific site of the river having water potential, which is a public asset, is allotted for commercial purpose and hence require due diligence to recover competitive price for such allotment. These also need monitoring for time bound execution, because public revenues are involved. In case of solar projects, no such public 5 assets are allotted. Wherever Govt. waste land is involved, transfer process is already provided in the Lease Rules. Therefore, there is the need for different approach for solar projects.

a. Solar Capacity Creations: Except a few micro level demonstration projects, there are no solar plants in the State. HPSEBL is purchasing solar power from 35 MW capacity plants of NTPC and Solar Energy Corporation of India located outside H.P. In line with the national level target of 100 GW by 2022, State will endeavour to set up about 700 MW capacity projects, including about 220 MW required for RPPO from solar source, by 2022.

b. Roof Top Net Metering : The electricity consumers of HPSEBL shall be eligible to install minimum 1 KW to maximum 5 MW capacity solar PV plants on their building roof top or its premises which will be connected to grid with bidirectional meters, where in consumer will use solar generation for his consumption and only the drawl from grid to meet the deficit will be billed and surplus generation will be injected in the grid and consumer will be paid for this quantum by HPSEBL. HPERC has already framed Regulations and fixed tariff of Rs. 5 per unit for surplus energy, which is one of the highest tariff in the region, so as to encourage investment. It is expected that industrial, commercial, institutional and domestic consumers with large consumption may opt for this mode.

c. Farmers and Unemployed Youth: In order to benefit from the Government of India (GoI) scheme of equity contribution of Rs. 50.00 laks per MW, State will encourage Farmers and Unemployed Youth to set up projects in a distributed and dispersed manner from 500 KW to 5 MW, with priority to smaller capacities. This will creates/capacity of 84 MW, as per GoI allocations.

d. Solar Parks of medium sizes to accommodate 50 MW to 100 MW capacities, in different load locations, will be set up under the Solar Park scheme of Govt. of India. In addition, State will endeavour to create land banks for allocation to power producers, on the lines of industrial estates.

5. Disposal of Power:

 (i) The solar power producers are at liberty to dispose the power generated in any manner they choose i.e. captive consumption, sale to any consumer within the State, sale to any trader or exchange or entity or consumer outside the State and sale to HPSEBL. Since the buyer is also at liberty to purchase from any producer, market demands that the producer is competitive, for which selection of site and execution of project needs to be efficient.

 (ii) HPSEBL is at liberty to purchase from any source and necessarily such source should be such that the landed cost of power at the consumer meter is the most efficient. HPSEBL has notified its Power Purchase Policy from renewables which inter alia provide for project location in proximity of load centres and EHT/HT sub-stations, least evacuation cost, reliable grid etc. In the land locked areas like Pangi, Lahaul-Spiti, Kinnaur, Dodra Kawar etc. till the time reliable grid is not available, limited capacity for local supply in mini grid mode will be promoted. HPSEBL shall purchase power from all producers under the scheme for Farmers and Unemployed Youth, subject to location criteria. In addition, power from smaller projects as distributed generation and larger project up to 5 MW will also be purchased to meet its RPPO and 24x7 supplies obligations in remote areas. Larger projects above 5 MW by IPPs or by SECI may be set up for sale of power outside the State or captive use, if not required by HPSEBL.

6. Tariff :

In order to encourage investment so as to gain experience and confidence in solar power generation, in the initial stages tariff for purchase by HPSEBL up to 5 MW capacities will be determined by HPERC.Regulations for this are already in place and tariff for 2015-16 is also notified. Tariff for above 5 MW capacities may be discovered through competitive bidding. Tariff for roof top installations have also been determined by HPERC.

7. Interconnection with grid:

 (i) Open Access to the transmission system is the right of generating company provided by the Electricity Act of 2003. Open Access to distribution system of HPSEBL has been provided by HPERC through Regulations. Therefore, the solar power generators have the right to use network of HP PTCL and HPSEBL as per conditions laid down in the Open Access and Connectivity Regulation of HPERC. Solar projects up to 2 MW capacity shall be allowed Solid Tap connectivity in 11KV network and above 2 MW capacity, the project line has to connect to 33KV or above sub-station.

8. Direct Benefits to the Locals:

(i) Of the total employment potential in the project, at construction and operations stages, 70% employments will be provided to bonafide residents of H.P., with preference to those who transfer private land or to the right holders of the Revenue estate where Govt. land is leased out for project. (ii) Where ever Govt. land, where the right holders have community rights, is lease out for project development, 1% of the total cost of the project, as fixed by HPERC on normative basis, shall be paid to Local Area Development Fund to the community for community development works, to be decided by the community of the Right holders. Where private land is used, no such contribution is mandatory but developer may contribute to local development voluntarily.

9. Merits of Solar Power in Himachal :

(a) Hydro power, particularly the small hydro as Renewable Energy (RE), has a limited potential where as solar has unlimited potential. (b) Solar is more perennial and equitably distributed across the State, unlike hydel. (c) In hills, grid reliability is a constraint due to geographical, topographical and climate constraints and decentralised generation from solar is more efficient and easy to access. (d) Solar is much firmer and efficient and complements hydro. Impounding water in hydel projects during day for peaking power will help load management. (e) No environment impact during construction and operation. (f) Low gestation period of 18 to 24 months and also reduced cost with technology upgrade is leading to tariff parity with hydel over time.

 10. Solar power potential:

National Institute of Solar Energy (NISE) has estimated a potential of 34 GW taking into account 3% of total wasteland and roof top surface areas of the consumers for this purpose. IREDA has estimated a potential of about 53 GW taking in to account 5% of the waste land. Therefore, the State has huge solar power potential.

                  While the State’s own requirement shall be met from clean sources in line with Policy of sustainable development, it is prudent to have energy mix instead of single source and hence coal and gas based sources should be substituted with clean and renewable sources, which are relatively firmer as base load, for reliability and security. Among the R.E. technologies, Solar is the best option.