The Ministry of New and Renewable Energy (MNRE) will asks the states to invite application from the unemployed youth to set up solar power plants, from 0.5 MW to 2. 5 MW capacity, either by themselves or through joint venture with companies and societies.
The MNRE has sent the proposal to Ministry of Finance for its comments and it is expected to come before the Union Cabinet for approval soon, an official from the ministry told Deccan Herald.
The government will select the successful candidates through lottery system and provide maximum subsidy of Rs 50 lakh to set up each solar plant. With the cost to set up 1 MW capacity solar plant around Rs 5 to Rs 5.5 crore, remaining capital, the promoters will have to arrange through loan from banks.
As these projects will come in association with the states, the MNRE is also in talks with the states to get some subsidy from them.
With this scheme being mandatory, the states have to sign a power purchase agreements with these plants, developers need not worrying about the returns from the investment. The unemployed youth will get to share revenue earned from the solar project in proportion to their holding in the company, said the official.
Each solar plant is to be dedicated to a sub-station. The spare capacity identified in each sub-station will decide the size of the solar power project. The state power utilities will notify the tariff and sign a 25-year PPA (power purchase agreement) with each plant.
However, the investors have to arrange lands to set up plant on their own, said an official adding that the Centre will spend Rs 16,050 crore for the scheme.
Willing states have to approach the MNRE and outline how much capacity is left in their grid for handling solar power. Source–