NE BUSINESS BUREAU
AHMEDABAD, AUG 2
Vibrant Gujarat government-run Gujarat Urja Vikas Nigam Limited (GUVNL) has suddenly withdrawn subsidy to small-scale distributed solar projects, affecting about 4,000 projects with an aggregate capacity of around 2,500 MW signed power.
This subsidy for purchase of electricity was given by the Industries Department of the state government under the Policy for Development of Small Scale Distributed Solar Project 2016.
This sudden somersault of the government has hit hard over 200 entrepreneurs who had ventured into generate an estimated 500 MW of solar power by investing Rs 10,000 crore as they won’t be getting their subsidy. Further, they would not be able to pay back the institutional loans and at a disadvantageous position.
“Necessity is the mother of invention holds good for enterprising Gujaratis. With an aim to help sustain small-scale solar project investors, over 80 percent of them farmers, the IVY Capital has launched Solar Optimal Solution to earn more than the subsidy,” said Rushiraj Patel, IIMA alumni and management consultatnt.
Throwing light on this scheme, Dhaval Jiyani, CEO, IVY Capital, said, “Solar Optimal Solutions (SOS) is a ray of hope for small solar power producers as they can run their business without incurring any loss. Apart from avoiding losses, more compensation can also be obtained through SOS.”
“Due to non-availability of subsidy, there will be a loss of 22% in the profits of the solar project. The subsidy was a major benefit for investors in paying off the loan at the start of the project,” Jiyani added.
Taliking to navjeevanexpress.com, Bhavesh Rathod, tech expert of IVY Capital, said, “SOS not only allows investors to convert this 22% loss into 31% gain, but also frees the entire solar plant from the worries of operation and maintenance for 25 years without any equity investment.
Asked about the initial investment plan of the company, Rathod said, “SOS is an innovative financial and technical agreement which aims to ensure that Gujarat does not lag behind in renewable energy and get maximum and safe return on investment is achieved by all investors. Developed by solar technocrats and solar project specialists, by equity investors backed and IVY Capital will infuse Rs 100 crore in 400 projects in phase one.”
This solar subsidy scheme was intended to support Prime Minister Narendra Modi’s ambitious renewable energy goals. In effect, distribution generation to Gujarat state power companies was expected to help reduce transmission losses, farmers would get electricity during the day, the environment would benefit and the Center and the State governments would benefit from GST revenue. It has large-scale employment potential too.
As stated in the policy, any eligible entity can set up a solar power plant with capacity ranging from 0.5 MW to 4.0 MW, and supply the solar power produced to the nearest GETCO substation.
