Karnataka is among the greatest states for utilizing solar energy and has become a solar power hub in India! Karnataka was the first state to announce a dedicated solar policy way back in 2011. From then onwards, the state has regularly updated all its policies to be aligned with the fast-changing environment in this industry.
Karnataka solar power plant has overtaken other states as the most attractive state for establishing rooftop solar projects, according to the State Rooftop Solar Attractiveness Index (SARAL) published by the Ministry of New and Renewable Energy (MNRE). The state government has put in place advantageous laws that allow consumers from all market sectors to independently generate solar power on their rooftops.
Let’s take a look at the key solar policies, government subsidies, and incentives available for solar projects in Karnataka, along with the investment opportunities and challenges.
Solar Policies In Karnataka
1. Karnataka Solar Policy 2023
At the heart of Karnataka’s solar initiatives lies the Karnataka Solar Policy 2023. The Karnataka Solar Policy 2023 aims to add 10,000 MW of solar power generation capacity across the state by 2025. The PM Kusum Yojana in Karnataka has significantly boosted the adoption of solar power among farmers and rural communities.
Salient features of the policy include:
- Mandatory installation of solar rooftop systems for certain categories of power consumers.
- Permission to install ground-mounted solar projects on agricultural land.
- 100% exemption on stamp duty and registration charges for land purchase/lease for solar projects.
- Simplified procedures and time-bound clearance mechanisms for solar projects.
- Incentives for MSMEs to set up solar-based power plants.
2. Net Metering Policy
Karnataka’s net metering policy allows solar system owners to export excess solar power to the grid. Surplus electricity generated by solar panels -can be transferred back into the grid through net metering, allowing consumers to receive credits for their efforts.
System owners are paid for net metered energy as per prevailing retail tariffs.
The net metering cap has been increased from 1 MW to 3 MW for a single project. Online net metering applications and approvals have made the process more efficient.
3. Solar Parks and Projects
The state has established several solar parks across districts like Tumkur, Chitradurga, Ballari, Kalaburagi, etc. Karnataka Renewable Energy Development Ltd. (KREDL) is the nodal agency that undertakes solar park development.
The Pavagada Solar Park with 2 GW capacity is one of the largest in the world. The state has been able to attract investments from major players like Adani, ReNew, and Azure Power for setting up utility-scale solar projects at these parks.
Government Solar Panel Subsidy
1. Solar Rooftop Subsidy
Karnataka’s government has rolled out attractive subsidies for solar rooftop installations. Karnataka offers a generous subsidy of 50% ( up to ₹50,000) for the installation of rooftop solar systems up to 3 kW capacity.
Residential and commercial property owners can obtain financial incentives for putting solar panels on their rooftops under the Solar Rooftop Subsidy scheme. Solar subsidy in Karnataka is available for residential houses, government buildings, schools, colleges, etc.
2. Capital Subsidy for Industries
Karnataka offers capital subsidies to industries investing in solar power infrastructure. A 30% capital subsidy is provided for rooftop solar projects in the industrial sector. MSMEs can avail a higher subsidy of 40%. There is also a special incentive for using locally manufactured solar equipment.
The economic landscape of Karnataka is heavily influenced by industries. Tamilnadu’s government gives an amount of capital subsidies to boost the use of solar energy.
3. Solar Water Heater Subsidy
The state of Karnataka’s clean energy plan must actively promote solar water heaters. To encourage the installation of solar water heating systems by individuals and organizations, the state offers subsidies.
A capital subsidy of ₹5000 per 100 LPD is available for the installation of solar water heating systems. Residential, commercial, and industrial consumers can avail of this subsidy.
In addition to the above subsidies, the government solar panel subsidy provides a 100% exemption from electricity duty for solar power consumption for 10 years from commissioning. Accelerated depreciation of 40% is also available for solar assets as per IT rules.
Investment Opportunities
Solar energy investment options are plentiful in Karnataka. Solar farms, component manufacturing facilities, and engineering, procurement, and construction (EPC) services are all available to investors.
Whether you’re interested in solar parks, rooftop installations, or industrial-scale ventures, Karnataka has something to offer every investor. Here is the breakdown of the offers across the solar value chain:
- Project development – Utility-scale, rooftops, floating solar, etc.
- Manufacturing – Polysilicon, ingots, wafers, cells, modules, etc.
- Ancillary industries – Mounting structures, power electronics, batteries, etc.
- R&D – Bengaluru is an innovation hub and home to research centers of leading solar companies.
With the growing demand for energy within Tamilnadu, the state has designed flexible policies, and this has become a lucrative offer for solar investors, be it domestic or international.
Challenges And Solutions
1. Land Acquisition and Clearances
Acquiring large tracts of contiguous land for solar parks has been a challenge. Single window clearance mechanism and deemed approval after prescribed timelines have reduced delays in obtaining project approvals and connectivity.
Considering this, Karnataka is streamlining the procedure to enable easier land acquisition and quicker approvals.
2. Grid Integration
Successful grid integration is always crucial and cannot be ignored. To facilitate the seamless integration of solar power into the current electrical grid, Karnataka is investing in grid infrastructure.
Karnataka has mandated forecasting and scheduling for solar projects above 5 MW capacity. Advance forecasting of power generation helps the system operator plan power flows efficiently.
3. Environmental Concerns
While solar energy is clean and green, it’s not entirely free from environmental concerns. Large solar parks have faced resistance from local communities.
To reduce any negative effects, measures, including environmental impact studies and sustainable land use practices, are being implemented and the entire state is fully dedicated to resolving these issues.
Careful selection of arid, non-agricultural lands for solar development can minimize these concerns.
KREDL has stipulated environmental monitoring guidelines for solar park developers. Groundwater levels, soil conditions, and ambient air quality need to be monitored before and after commissioning the park.
Solar projects are now required to set aside 0.5% of their capital cost towards a community development fund.
Future Outlook
In Tamilnadu, solar energy appears to have a brighter future than ever. Karnataka plans to add another 5 GW of solar capacity by 2025, taking the total to 15 GW. Because of its clear legal structure, tempting offers, and devotion to sustainable growth, the state is well-positioned to become a global leader in renewable energy, not just in India.
With the aim of making Bengaluru the country’s solar city, rooftop solar adoption will be accelerated through innovative business models like solar leasing. Karnataka plans large-scale floating solar projects of 500-1000 MW capacity.
The policy and regulatory framework is stable, power evacuation infrastructure is being strengthened, and skilled manpower is available.
Conclusion
Karnataka’s solar trip is nothing short of amazing, to sum it up. Karnataka has emerged as a solar power leader in India owing to its proactive policies, availability of land and infrastructure, and abundant sunlight. Karnataka was the first to roll out a dedicated solar policy back in 2011, which kick-started the growth story.
The recently announced Karnataka Solar Policy 2023 provides further impetus with its focus on rooftop solar adoption and promotion of local manufacturing. Solar parks developed across the state have already seen global players setting up multi-hundred-megawatt projects.
However, the government is addressing these through single window clearances, investments in transmission infrastructure upgradation, and stipulations regarding community development funds.
With the aim to install 15 GW of solar capacity by 2025, solar power plants in Karnataka are gearing up to consolidate their position as a renewable energy hub. The state has all the required ingredients – supportive policies, infrastructure availability, skilled manpower, and an engineering ecosystem to emerge as a solar leader.
Backed by its track record and future plans, a solar power plant in Karnataka is surely poised to continue its solar success story in the coming years.
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