A union cabinet panel on Wednesday approved the setting up of over 5,000 MW of grid-connected solar photovoltaic (PV) power projects at an estimated outlay of Rs 30,000 crore.
Briefing reporters following the meeting of the Cabinet Committee on Economic Affairs (CCEA), Power and New and Renewable Energy Minister Piyush Goyal said the decision to promote solar power through “viability gap funding” (VGF) was in line with Prime Minister Narendra Modi’s promise to make India the world’s largest generator of solar power.
“Installation of 5,000 MW solar PV plants will generate about 8,300 million units per year, which caters power to almost 2.5 million households,” said a release from the ministry of new and renewable energy.
According to the statement, the estimated requirement of funds to provide VGF for 5,000 MW capacity solar projects is estimated to be Rs 5,050 crore.
This includes handling charges to state-run Solar Energy Corp. at the rate of 1 percent of the total grant disposed and Rs.500 crore for the payment of security mechanism for the VGF schemes.
“These projects will have a market-found base rate, and thereafter reverse bidding will determine who wins the VGF. Actual funding will be determined by reverse bidding,” Goyal said.
The government has set a target of achieving 1,00,000 MW grid-connected solar power by 2022.