- Neha Amin
- March 8th, 2021 6:00 am
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A 500-member meeting of manufacturers was held in Gandhinagar last week
Solar power producers meet Union ministers over uncertainty about solar power subsidies and urge them to ask Gujarat government to grant subsidies as promised; A senior government official claims that there were no subsidies
The state's once optimistic small solar power producers are now in no man's land and feel abandoned. While the investor-friendly government of Gujarat has refused to subsidize small and medium-sized solar power companies, it has made another unfriendly proposal. “Take your money back,” the government has told manufacturers.
This has caused panic among business people who have invested nearly 1,000 billion rupees in basic infrastructure. They say the government withdrew their word.
The Gujarat government recently got cold feet over the tempting subsidy it announced for power generators and is now unwilling to get involved. Without any assurance from the state government, the association of solar power manufacturers knocked on the doors of the “Delhi Durbar”. Members met with Union Ministers from Gujarat, including Amit Shah, last week,
and provided information on the subsidy.
A meeting of manufacturers was held in Gandhinagar last week, attended by 500 members. They discussed the uncertainty about their projects and investments and raised concerns about financial sustainability.
The meeting was also attended by members of the Gujarat Federation of Solar Industries (GFSI), ASSOCHAM, GCCI, FCCI and others. Members said they bought land in villages that was mostly arable land. Conversion to NA status is occurring in many cases and is ongoing in others. “What do we do with this country now?” Said GFSI President Kishorsinh Zala.
A senior official said this was the first time the government offered to repay. He claimed that there were no subsidies and that the manufacturing industry was applying undue pressure. “We offered to reimburse the money they put on the program,” he added.
Two weeks ago the state GUVNL issued a statement stating that no small solar system is eligible for funding. This created confusion as GUVNL doesn't give any subsidies anyway. The association took the matter up with the GUVNL and asked them to make their point of view.
Meanwhile, the Federation members traveled to Delhi and represented the Union Ministers Amit Shah, Mansukh Mandaviya, Purushottam Rupala, Mahendra Munjpara and Darshana Jardosh. They urged them to ask the Gujarat government to provide subsidies to power generating units as promised.
Kishorsinh Zala said the state government had announced subsidies for solar power production facilities in its industrial policy. More than 4,000 small electricity projects with a total capacity of 2,500 MW had signed agreements following the political announcement. They have invested a total of Rs.1,000 billion in purchasing land and other equipment. But suddenly the future is uncertain.
“The situation has caused concern among investors who are now keen to terminate all PPAs signed with GUVNL. The government should intervene immediately on this matter and reverse the decision not to provide subsidies under the SSDP, ”said Zala.
According to the political announcement, the generation and delivery of solar energy to Gujarat's state-owned electricity company should help reduce transmission losses, provide daytime power to farmers, help the environment and generate GST revenue for the center and state governments.
As stated in the guideline, every authorized facility can build a solar power plant with an output of 0.5 MW to 4.0 MW and deliver the generated solar power to the next GETCO substation at 11 KV voltage level.
Manufacturers had previously complained that the electricity purchase price in Gujarat is low – at Rs 2.83 per unit compared to Rs 3.15 and Rs 3.14 per unit in neighboring Maharashtra and Rajasthan. The electricity producers said the margins were low anyway, and a lack of subsidies would make the projects financially completely unprofitable.