All Solar energy based power project Developers (Solar PV/Solar thermal) and manufacturing units of equipment’s, ancillaries related to Solar Power projects shall be eligible for benefits under the Policy. Only new plant and machinery shall be eligible for installation under the Policy.


  1. There will be four categories of Solar Projects covered under the policy:

Category I

Category II

Category III

Category IV

Projects selected as per the competitive bidding process for selling power to MP Discoms / MP Power Management Company – Capacity as per RPO targets Specified by MPERC which I have mentioned in above table

Projects set up for captive use or sale of power to 3rd party within or outside the state or for sale of power to other states through open access – Unlimited Capacity

Projects set up under Renewable Energy Certificate (REC) mode – Unlimited Capacity

Projects under Jawaharlal Nehru National Solar Mission – As per JNNSM guidelines

Decentralized and off-grid solar projects: The Govt. of MP will promote decentralized and off-grid solar applications, including hybrid systems as per guidelines issued by MNRE.

  1. Performance Guarantee:

Category I project: It will be as per the guidelines specified in the qualification/selection document issued by GoMP.

Category II Projects and Category III: The Developer shall submit Performance Bank Guarantee (for projects being setup on government land at the rate of Rs. 5.0 Lac/MW or part thereof to New & Renewable Energy Department (GoMP). The Bank Guarantee shall be valid for a period of twenty four (24) months for Solar PV projects and for a period of forty (40) months for Solar thermal projects respectively

  1. Contract Demand Reduction:

The Industrial Consumers opting to buy power from Solar Power Project under category II and III shall be allowed corresponding pro-rata reduction in Contract Demand on a permanent basis but subject to the decision of MPERC in this regards.

  1. Metering:

Metering equipment, as may be stipulated by MPPTCL or by respective MP Discom, shall be installed at the interconnection point which shall be line isolator of outgoing feeder on HV side of the pooling substation. Developers will install metering equipments at their own cost

  1. Grid evacuation & evacuation facility

The developer shall be responsible for laying of power evacuation line from generating station to the nearest substation or interconnection point. He shall also be responsible for interconnection arrangement which includes transformer panel, protections, metering etc., at the substation or interconnection point.

  1. Wheeling and transmission charges:

The Developer shall be responsible for payment of all wheeling and transmission charges to the MPPTCL/respective Distribution Company in case of sale of power to Third Party Consumers/ Distribution Licensee/ Power Management Co. Ltd utilizing their network the payment shall be subject to the regulations of MPERC.

  1. Land:

For setting up Solar Power Plant in Madhya Pradesh, maximum land use permission for government land, if available, to the Solar Power Producer shall be 3.0 Hectares per MW. In case the Developer purchases private land for the project, then they will be eligible for an exemption of 50% on stamp duty.

In case of land owned by Revenue Department or any other State Government Department, the New & Renewable Energy Department shall take possession of the land and subsequently give permission for use of land to the concerned Developer (whose project has been accorded administrative approval).

  1. Wheeling charges:

The policy provides a grant of 4% (in terms of energy injected) by the state under wheeling charges to all solar power projects.

  1. Electricity Duty:

Policy provides 10-year (from COD) exemption in electricity duty (including captive units),

  1. Banking:

Banking (2% banking charges) of 100% of energy in every financial year shall be permitted. The balance energy, if any, at the end of a Financial Year after return of banked energy shall be purchased by the concerned State Distribution Company/ State Power Trading Company in accordance with the rules/ directions of MPERC.

  1. VAT:

Equipment’s purchased for installation of solar power plants will be exempted as per VAT rules and entry tax.

  1. CDM Benefits:

CDM benefits to the solar power project Developers/Investors shall be as per the provisions specified by MPERC.

  1. Others:

Regarding other facilities/incentives such as Open Access, Reactive Power and Renewable Purchase Obligation, the provisions specified by MPERC shall be applicable .

Source: MNRE

The detailed policy document can be downloaded from the following link:



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