Incentive offered under JNNSM

Incentives offered under JNNSM

  • The Bundling Scheme: The Central govt. has discretionary 15% quota in (thermal) power which can be distributed to states. In this scheme, the central government purchases power from project developer at the market price. It then bundles power from the discretionary quota along with the power purchased from the project developers and sells it at a subsidized price.Company view this as an incentive to sell power at a higher cost. They do not bear the brunt of the impact of the low pricing tariff because of the high cost of setting up of solar power plants. The government finances this subsidized price.
  • Generation Based Incentive (GBI): GBI is a price based incentive provided to support small grid solar projects (100KW to 2 MW) connected to the state utilities. The incentive provided is the difference between the fixed CERC price and the estimated market price. Projects are selected on first come first serve basis.
  • Viability Gap Funding (VGF): The government provides funds to support infrastructure projects that are not anticipated to have high financial returns. Solar power projects (750 MW grid connected) are selected through an open competitive bidding process and provided up to 20% of capital costs.
  • Exemption from excise duties and concession on import duties on components and equipment’s required to set up solar power plants.
  • 10-year Tax holiday for solar power projects.
  • Wheeling, Banking and Third party sales, buy back facility by states.
  • Guaranteed market through Solar power purchase obligations for states.
  • Reduced wheeling charges as compared to those for conventional energy.
  • 100% FDI investments in renewable energy generation projects.
  • Special incentives provided to promote exports from India for various renewable energy technologies under renewable sector specific SEZ.
  • Payment security mechanism to cover the risk of default by state utilities/discoms.
  • Subsidy of 30% of the project cost for off grid PV and solar thermal projects.
  • Loans at concessional rates for off-grid applications.

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