The ministry would provide a generation based incentive of a maximum of Rs 12 per kWh to the eligible projects which are commissioned by December 31, 2009, after taking in account the power purchase rate (per kWh) provided by the state electricity regulatory commission (SERC). This incentive would be provided through the Indian Renewable Energy Development Agency (IREDA). Any project that is commissioned after December 31, 2009 would be eligible for the incentive with a 5% reduction and a ceiling of Rs 11.40 per kWh.
The generation based incentive would continue to decrease, as and when the utility signs a power purchase agreement (PPA) at a higher rate. The proposed annual escalations agreed with the utility, as in force, must be reflected in the PPA. The generation based incentive approved for a grid interactive photovoltaic (PV) power generation project would be available for a maximum period of ten years from the date of approval and regular power generation from that project, provided the utility continues to purchase power from that grid interactive PV power plant.
According to sources, the state agencies and utilities would provide all assistance and support to the project developers for evacuation of power from the project site, as is done in case of other renewable energy based projects. However, if separate guidelines for solar power projects are approved by the respective regulatory commissions, then these would be applicable. The grid interactive solar PV power projects will be considered for generation based incentive on first come first served basis.
The ministry has made it clear that all Central and state power generation companies and public/private sector PV power project developers who have set up or propose to set up a registered company in India would be eligible for generation based incentives.