:: State Policy


Unofficial Translation of G.R.

Policy on generation of power through solar energy e.g. solar thermal, solar photovoltaic, solar photo-synthesis, wave energy etc.

Government of Maharashtra
Industries, Energy & Labour Department
Mantralaya, Mumbai 400 032.

Government Resolution No. NCP-1099/P.No.319/Urja-7
dated 9th July, 1999 (Marathi G.R.)


Looking to the increased demand or electricity in the State and in order to fulfill the same, the Central Government as declared the policy to give priority to generation of power through non-conventional and renewable energy sources in parallel with conventional sources of energy. The State Government has adopted the same policy. Earlier the State Government has declared generation of power through non-conventional energy sources like Municipal Solid Waste/Liquid Waste, and Agricultural Residues. There is a good demand to generate power through solar energy and if the policy of generation of power through solar energy is finalised the private promoters will get attracted towards such projects. With this background the finalisation of policy on production of power through solar energy was under consideration of the State Government.


The State Government has taken following decision on generation of power through solar energy on priority.

1. Tariff
The Maharashtra State Electricity Board (MSEB) will purchase power generated from solar energy at the rate of Rs.2.25 per unit and the base year will be 1994-95. 5% increase in the tariff will be granted each year for the first 10 years. The tariff will remain fixed for next 3 years and the remaining 7 years 5% increase in tariff rate shall be given.

2. Banking
Permission will be granted to bank 100% of power generated through solar energy for one year. There will be no time limit for the banking. The balance of electricity banked with MSEB cannot be carried forward in the second year. The MSEB shall pay for the balance electricity at the rate prevailing during that year to the promoter.

3. Transmission Losses and Wheeling
MSEB shall bear the transmission losses for the first three years for the generation of power through solar energy. From the fourth year the transmission losses shall be fixed at 2%.

4. Permission to sale of electricity to any two units (Industrial or commercial) shall be given for the power generated through solar energy. Wheeling charges of 2% shall be levied.

5. Infrastructure Facility
a> Evacuation Facility - The 50% of expenditure incurred on transmission lines and sub-station installed for power projects through solar energy shall be borne by MSEB and the balance 50% shall be recovered from promoters by MEDA and it will be deposited with MSEB. The expenditure on transmission lines from MSEB sub-station upto project site and related equipments at site shall be borne by the promoter. b> Approach Road If the finance is made available by the promoter for the approach road, then PWD department shall construct the approach road.

6. Octroi / Entry Tax
The 100% expenses incurred on Octroi/Entry Tax during the import of machinery for the project shall be refunded by MEDA.

7. Sales Tax Benefits. (withdrawn with effect from 01/01/2000)
100% sales tax benefit on qualifying investment shall be given for the power projects on solar energy. Under the qualifying investment, Plant and Machinery, New Buildings, Compound Wall, Land Development, Technology Development and Design are considered. The sales tax benefits shall be as under -

S.No. Plant Load Factor Sales Tax benefit percentage. 01 15% 50% 02 16% 60% 03 17% 70% 04 18% 80% 05 19% 90% 06 20% 100%

Every year 1/6th of total sales tax benefits shall be given to promoter. The benefits can also be given on the products of the Associate Companies of the promoter. The company who purchases power can also be considered as Associate Company.

The procedure for getting sales tax benefits shall be decided by Finance Department.

8. Protection to Foreign Exchange Rate
If the investment for solar energy projects is in foreign currency, then during the loan repayment period if the change in exchange rate is more than 5%, then during that particular year protection on loan repayment in excess of 5% of exchange rate shall be given. Protection on share capital shall not be given.

9. Permission for transfer of ownership of Electricity Generation Equipments.
After installation of entire project by promoter's own fund, permission will be given to sale the equipment on per MW basis. In such cases, facility is available for the project can be availed only by the purchaser. The original promoter cannot avail such facility.

This policy is applicable to all projects on solar energy e.g. solar thermal, solar photovoltaic, solar photo-synthesis, wave energy etc.

By the name and order of Government of Maharashtra.

(S.P. Nande).
Officer on Special Duty (Urja)