Report

BUSINESS OPPORTUNITIES FOR RENEWABLE ENERGY IN INDIA
Chapter I
Introduction
This report gives information on all the possible RE areas that have scope for investment.
It offers detailed information on the existing and potential strength of each programme,
the potential sites in the country, the achievements to date, specific investment
opportunities and subsequent benefits that can be accrued, resources and support
available, and fiscal and financial incentives to encourage investment. It also gives a
glimpse of the policies and procedures under each RE area. The technology areas appear
in the following order:
Power Generation Technologies
Wind Power
Small Hydro
Biomass Power
Biomass Cogeneration
Biomass Gasifiers
Energy from Wastes
Solar Energy Technologies
Solar Photovoltaics
Solar Thermal
Stand-alone Wind Energy and Hybrid Systems
RAGHURAM.C.SORAGAVI (MBA IN POWER MANAGEMENT) 1

Rural Energy Technologies
Biogas
Improved Chulhas (Cookstoves)
New Technologies
Chemical Sources of energy
Hydrogen Energy
Geothermal Energy
Alternative Fuels for Surface Transportation
Tidal Energy
Bio-Diesel

Chapter II
2.1 Power Generation Technologies
Special emphasis is being given to the generation of grid quality power from renewable
sources of energy.
MNES has issued guidelines to all the states on policies in this sector to encourage
commercial development. The total installed capacity of power generation from various
non-conventional energy sources has reached about 4872.5 MW. The details of specific
areas are given in the next page.
These technologies are discussed in detail in the chapters ahead.
Cumulative Achievements of Renewable Energy Programmes in India
(Upto 30-09-04)
Cumulative India's Position in

Source/Technologies Units*
Achievements the World
Power Generation
Wind Power MW 2483.2 Fifth
Small Hydro Power (up to 25 MW) MW 1603.32 Tenth
Biomass-based Power MW 681.53 Fourth
Biomass Gasifiers MW 60.480 First
Solar Photovoltaics MW 2.54 Fifth
Energy from Urban & Industrial
MWe 41.43 -
Wastes
Total 4872.5
* MW - MegaWatt

2.2 Wind Power
Highlights
India is the fifth largest wind power producer in the world after Germany, the
USA, Denmark and Spain, with an installed capacity of about 3000 MW. (Table
1.1)
The gross wind energy potential in India has been estimated at 45,000 MW.
However, the technical potential is limited to about 13,000 MW.
Wind is one of the largest RE source in the country, based on mean annual wind
power density (MAWPD)
The Wind Resource Assessment Programme (WRAP) carried out in India to
assess the wind potential is one of the largest programmes of this kind in the
world covering around 1000 wind monitoring and mapping stations in 25 states
and union territories. This programme is being implemented by the state nodal
agencies (SNAs) and C-WET through the Wind Energy Survey Project. WRAP
has so far identified 208 potential sites in 13 states
States with high wind power potential are Tamil Nadu, Gujarat, Andhra Pradesh,
Karnataka, Kerala, Madhya Pradesh and Maharashtra. About 11.3 billion units of
electricity have been fed to various state grids from wind power projects (Table
1.2). Almost 80% of the power thus generated has been used for captive
consumption, and the rest sold to the grid or to a third party

Some 30 project sites have been developed in the high potential states under the
Demonstration Programme, resulting in a capacity of 65 MW
About a dozen domestic companies are manufacturing wind power turbines and
components, achieving an annual turnover of Rs 1,500 crore. Wind electric
generators ranging from 55 to 1250 kW rating have been developed and
manufactured in the country by using the latest technologies.
State-of-the-art wind power technologies are now indigenously available in India.
An annual production capacity of 500 MW has been established. Wind electric
generators up to 1250 kW unit capacity are now being manufactured.
Blades, a crucial component of wind turbines, is manufactured in India. Nearly 80
per cent indigenisation has been achieved
R&D activities undertaken through research institutions, laboratories, technical
centres:
o State-of-the-art wind R&D centre and field-test station established
o A project on the "Development of an Intelligent Power Controller for
Wind Electric Generators (WEGs)" has been undertaken by the
Electronics Research & Development Centre (ERDC), at
Thiruvananthapuram to maximise generation and reduce reactive power
requirements of WEGs. The Controller has been fabricated and field tested
o A project on "Power Quality and Integration of Wind Farms in the Grid"
has been taken up jointly by ERDC, Thiruvananthapuram, in collaboration
with institutions from Denmark to prepare guidelines for the integration of

wind turbines with weak grids. The guidelines have been circulated to the
potential states.
Table 2.1
State-wise Wind Power Installed Capacity in MW (As on 31-12- 2004)
Demonstration Private Sector Total
State
Projects Projects Capacity
Andhra Pradesh 5.4 95.9 898.8
Gujarat 17.3 202.6 202.0
Karnataka 7.1 268.9 209.2
Kerala 2.0 0.0 2.0
Madhya Pradesh 0.6 27 22.6
Maharashtra 8.4 402.8 407.4
Rajasthan 6.4 256.8 178.5
Tamil Nadu 19.4 1658 1361.6
West Bengal 1.1 0.0 1.1
Others 0.5 0.0 0.5
Total 68.2 2912.0 2980.2
Table 2.2
Total Generation from Wind Power Projects (kWh)
(As on 31-12- 2004)
State Generation
Andhra Pradesh 622340136
Gujarat 1304183451
Karnataka 1186445699
Kerala 15862500
Madhya Pradesh 171752939
Maharashtra 2395479421
West Bengal 1651762
Tamil Nadu 10399971308
Rajasthan 73303417
Orissa 1174856
Total 16172165489

STATE-WISE/YEAR-WISE GENERATION FROM WIND POWER PROJECTS (kWh)
States 2000-01 2001-02 2002-03 2003-04 Total

Andhra Pradesh 87,032,475 114,988,086 93,634,923 92,238,695 587,409,287
Gujarat 142,227,142 134,759,803 157,612,149 138,303,120 1,205,290,461
Karnataka 72,363,609 92,859,341 165,203,907 306,675,709 732,275,699
Kerala 2,582,228 2,476,390 755,359 0 15,862,500
Madhya Pradesh 28,859,874 28,238,283 30,391,441 18,942,964 158,930,039
Maharashtra 142,575,869 332,747,859 636,005,296 602,392,663 1,812,191,089
Tamil
1,095,839,373 1,245,763,198 1,305,704,301 1,430,452,101 9,392,084,985
Nadu
Rajasthan 5,649,422 18,578,126 21,535,791 15,001,380 62,390,384
West
338,470 435,905 473,723 1,300,450
Bengal
Total 1,577,029,992 1,970,749,557 2,411,279,071 2,604,480,355 13,967,724,894
Cost Economics
Capital cost of wind power projects ranges from Rs 4.5-5.5 crore per MW
Cost of generation is estimated to be Rs 2.25-2.75 per kWh (depending upon the
site)
These costs compare favourably with new conventional power projects
There is the added advantage of short gestation, and modularity of systems
The costs are expected to decline and profitability increase with technology
improvements, and increase in size of turbines, and optimal planning and site
selection
A cost ceiling of Rs 3.5 crore/MW has been fixed for the determination of MNES
support to state government projects

Aims and Targets
The wind power programme in India aims at catalysing commercialisation of wind power
generation in the country, through:
The implementation of a countrywide WRAP
R&D support
Implementation of demonstration projects to create awareness and opening up of
new sites; close involvement of utilities and industry
development of infrastructure capability and capacity for manufacture,
installation, operation and maintenance of wind electric generators
Adaptation of technologies for improved performance of turbines at low to
medium wind speeds and improved capacity utilisation, cost reduction and high
reliability, and increased life of turbines
Policy support
Targeted capacity for the next five years is about 1,500 MW. This will require an
investment of Rs 7,500 crore. Most of this investment is expected to come from
commercial developers.
Investment Opportunities
Investment opportunities are available for:
Corporate users of power
Long-term investors in power
Promoters of clean power
Potential pollution traders

Opportunities exist for Indian companies for joint ventures in the production and services
related to wind electric equipment:
Investment in generation of power
As developers/project promoters
Consultancy
O&M
Monitoring and inspection
Opportunities also exist for export of wind related services such as:
Consultancy
Wind resource assessment
Formulation of policies
Project planning
Guidelines for Project Implementation
The following basic guidelines have been laid down for healthy and orderly growth of the
sector:
Location of project on a site with optimal parameters
Selection and installation of state-of-the-art machines
Optimum generation of power; proper utilisation of incentives
Capacities to be announced for each windy location in line with power evacuation
facilities; project clearance before commencement of work and commissioning
certification in accordance with the prescribed guidelines

Detailed Project Reports (DPRs) must be submitted and must include complete
information on:
Site
Selection of equipment
Capital cost/mechanism of financing
Annual energy output
Cost of generation
Captive generation or sale
O&M systems planned
Site selection and micro-siting
Quality aspects:
o Wind turbine - Type approval/power curve certificate/self-certification by
manufacturers
o Suppliers manufacturing base and installation support infrastructure
o Quality systems adopted
o Grid Parameters - Conformity with laid down parameters
o Minimum monthly average power factor
o O&M contract
o Spare-parts stock
o Submission of "Monthly Energy Output Statements"
Policy Measures and Incentives
The policy framework and incentives on offer are:

Fiscal and financial incentives
Wheeling, Banking, Third Party sale and Buy-back facility by State Electricity
Boards (SEBs)
Capital subsidies and Sales Tax incentives in certain states
Soft loans from the Indian Renewable Energy Development Agency Ltd (IREDA)
Fiscal and Promotional Incentives from Central Government
The following fiscal and promotional incentives are available from the Central
Government:
Concessional import duty on specified wind turbine parts
Accelerated depreciation in the first year
Sales Tax, Excise Duty relief
Loans through IREDA
Five-year Income Tax holiday
Nine states have introduced policies for wind power based on MNES guidelines:
2 per cent Wheeling charges
Banking up to one year
Third Party sales at remunerative prices
Buy-back facility at minimum price of Rs 2.25 per kWh (Base year 1994)
5 per cent annual escalation in tariff
Financial Assistance
In case of state government projects, 60 per cent cost of the wind turbine equipment,

maintenance spares, and erection and commissioning (subject to a benchmark cost of Rs
3.5 crore/MW) would be borne by the Central Government. All other costs will be met by
the state government.
IREDA Loans for Wind Power Projects:
IREDA loans for wind power projects are available under different schemes, as follows:
Project financing
Equipment financing (up to 1 MW per party per financial year for grid-connected
projects)
Manufacturing equipment.
The terms for each of these categories of finance are as follows:
Project Financing
(i) Development of wind farms on lease basis 13.75%
(ii) Development of wind farms on ownership basis 13.5%
(iii) Development of wind farms by machines suppliers / manufacturers
upto 5 MW /party/year on built, operate, own, lease, transfer basis 13%
(iv) Development of wind farm / estates with minimum capacity of 10
MW by Cooperative Sector / Public Joint Sector / Private Sector
Companies on built operate, own, lease, transfer basis 12.75%
(v) New technology above 750 KW machines (loan to be provided only
under International lines of credit) 12.5%
(vii) Promoter's Contribution 30%

(vi) Repayment Period * 10 years.
Equipment financing (Up to 1MW per party per financial year, Grid connected)
(i) Interest 14.5%
(ii)Promoter's Contribution Loan up to 75% of the cost of eligible
equipment.
(eligible equipment comprise of WEG,Tower,Control Panel,Transformer
and Reactive Power Compensator)
(ii) Promoter's Contribution 25%
(iv) Repayment Period * 10 years.
Manufacturing of Equipment
(i) Interest 14%
(ii)Promoter's Contribution 30%
(iii) Term loan up to 70% of total project cost
(iv) Repayment Period* 8 years.
* including moratorium period
Other Applications of Wind Energy
While grid-connected power generation from wind is a key focus area for MNES,
incentives are available for other applications of wind energy such as water pumps and
battery chargers. These are covered under Solar Energy Technologies Stand-alone

applications of Hybrid Systems and Wind Energy. For more information on the various
incentive structures, please refer to the respective technology area in appendices.
Wind power project at Jogimatti in Karnataka
2.3 Small Hydro Power
Highlights
The focus of the Small Hydro Power (SHP) programme is on promoting
commercialisation and active private sector participation
An estimated potential of about 15,000 MW of SHP exists in India
MNES has a database of 4,233 potential sites with an aggregate capacity of
10,324 MW for projects up to 25 MW (Table 2.1)
In 1989, the total installed capacity of SHPs up to 3 MW capacity was only 63
MW. In just 12 years, this capacity has increased nearly four-fold to 250 MW
SHP between 3-25 MW were brought under the purview of MNES in 1999-2000

At the end of Dec 31,2004,the total installed capacity of SHP projects upto 25MW
station capacity was 1693 MW.
A capacity of 80.39 MW was added during 2002-03.SHP projects with a total
capacity of 84.04 MW were commissioned during the year 2003-04,taking the
total installed capacity to 1603 MW.
Most SHPs are grid-connected. However, there are some projects, which are
decentralised and are managed by local community organisations or NGOs
SHPs are developed in the potential regions either by SEBs or the state agencies
responsible for SHP development or by Private Sector
The 14 potential states which have announced their policies for private sector
participation in the SHP sector are Himachal Pradesh, Uttar Pradesh, Uttaranchal,
Punjab, Haryana, Madhya Pradesh, Karnataka, Kerala, Andhra Pradesh, Tamil
Nadu, Orissa, West Bengal, Maharashtra and Rajasthan
Recently, a programme on development and up-gradation of water mills has been
started by MNES. This would enable the direct use of mechanical power for
different applications
MNES is also implementing a UNDP-GEF Hilly Hydro project in 13 states of
Himalayan and Sub-Himalayan region
159 SHP projects with a capacity of 488 MW are under implementation.

Small Hydro Power project in Himachal Pradesh
India has a well-established manufacturing base for a full range and type of SHP
equipment. There are over eight manufacturers in the country in the field of SHP
who are supplying various types of turbines, generators and control equipment.
Aims and Targets
Keeping in view the overall policy of the Government of India to encourage private
sector participation in the field of power generation, the thrust of SHP programme is
to set up commercial SHP projects. 14 states have suitable policies in this direction. A
capacity addition of 600 MW is envisaged during 2002-07 through:
A nationwide SHP resource assessment
Encouragement to commercial SHPs
Special incentives to northeastern states to exploit SHP potential
Projects aggregating 100 MW under the renovation and modernisation (R&M)
programme

Demonstration projects based on commercially viable and environmentally sound
technologies
Development/Upgradation of 1000 water mills for mechanical and/or electrical
applications

Table 3.1
MNES' Database of Small Hydro Potential Sites Identified in India up to 25 MW
Capacity
Sl No Name of State Identified Sites up to Total Capacity
25 MW (in MW)
1 Haryana 22 30.05
2 Himachal Pradesh 323 1,624.78
3 Jammu & Kashmir 201 1,207.27
4 Punjab 78 65.26
5 Rajasthan 49 27.26
6 Uttar Pradesh 211 267.06
7 Uttaranchal 354 1,478.23
8 Gujarat 290 156.83
9 Madhya Pradesh 85 336.32
10 Chattisgarh 47 57.90
11 Maharashtra 234 599.47
12 Andhra Pradesh 286 254.63
13 Karnataka 230 652.61
14 Kerala 198 466.85
15 Tamil Nadu 147 338.92
16 Bihar 92 194.02
17 Jharkhand 89 170.05
18 Orissa 161 156.76
19 West Bengal 68 202.75
20 Sikkim 145 182.62
21 Arunachal Pradesh 492 1,059.03
22 Assam 46 118.00
23 Manipur 96 105.63
24 Meghalaya 98 181.50
25 Mizoram 88 190.32
26 Nagaland 86 181.39
27 Tripura 8 9.85
28 A&N Island 6 6.40
29 Goa 3 2.60
. Total 4,233 10,324.37

Business opportunities exist in:
Industry-based R&D
Technical collaboration with equipment manufacturers of small hydro
As developer/promoter of commercial SHP projects
Resource assessment, Detailed survey and Investigation, DPR preparation for
projects
Detailed designing of SHP projects
Consultancy
Fiscal and Promotional Incentives
The facilities available in the states include Wheeling, Banking, attractive Buy-back rate,
and facility for Third-party sale among others. In order to accelerate development of SHP
power in the country, MNES is providing incentives for:
Detailed survey and investigation -- up to Rs 3 lakh per site
Detailed project report preparation - up to Rs 2 lakh per project
Interest subsidy for commercial projects - up to 7.5 per cent in the hilly regions
and up to 5 per cent in the plains
Under special incentives for the northeastern region and Sikkim, capital grant of
up to Rs 7.5 crore per MW is available for SHP projects in the region. The
maximum support per project is Rs 22.5 crore

Capital subsidy for SHP projects in hilly regions/A&N Islands executed by
government departments/SNAs - up to Rs 4.5 crore per MW
Financial support for renovation, modernisation and capacity up-rating of old
SHP stations - up to Rs 2 crore per MW or 75 per cent of the R&M cost,
whichever is lower. The R&M scheme has been extended to cover SHP projects
up to 15 MW with a maximum support of Rs 10 crore per project
Financial support for development/upgradation of water mills: up to Rs 30,000 or
75 per cent of actual cost, in mechanical mode and Rs 1.0 lakh or 75 per cent of
actual cost in electrical/electrical plus mechanical mode per mill
IREDA, the financial institution under MNES, provides Term loans for setting up
of SHP projects up to 25 MW capacity in the commercial sector.
2.4 Biomass Energy and Cogeneration
Highlights
Currently, biomass contributes 14 per cent of the total energy supply worldwide
and 38 per cent of this energy is consumed in developing countries,
predominantly in the rural and traditional sectors of the economy
The various applications of biomass energy include:
o Thermal or heat
o Mechanical water pumping for irrigation
o Power generation (stand-alone or grid-connected) including village
electrification and industrial applications

19,500 MW (including 3,500 MW from biomass cogeneration-Table 4.1) can be
generated from fuel wood, crop residues and forest sources(about 500 million
tonnes per annum) and bagasse in sugar industry
A district level biomass resource assessment studies in 6 potential States will be
initiated during the year to help identify locations where the density of biomass
availability is adequate and available for power projects
Biomass Resource Atlas for India is under preparation
The prime power generation/ cogeneration technologies using biomass are:
o Gasification
o Direct combustion
57 bagasse based cogeneration projects aggregating 437 MW capacity have been
commissioned and 35 projects aggregating 323 MW are under implementation
(Table 4.2)
A cogeneration project with 87 Ata pressure and 5150C have been commissioned
in Andhra Pradesh and three such projects are under implementation in Tamil
Nadu, UP and Karnataka
52 commercial grid-connected biomass-based power projects aggregating
290MW capacity have been commissioned, and 41 projects of 284 MW capacity
are under implementation (Table 4.2)
Table 4.1
Potential for Bagasse-based Cogeneration in Major Sugar Producing States in India
State Potential Commissioned till
(in MW) December 31, 2004
(in MW)
Maharashtra 1,000 32.5

Uttar Pradesh 1,000 73.0

Tamil Nadu 350 138.5
Karnataka 300 116.0
Andhra Pradesh 200 63.0
Bihar 200 0
Gujarat 200 0.50
Punjab 150 12.0
Others 100 15.00
Total 3,500 450.5
Aims and Targets
Existing Projects
The current status of Biomass Power and Cogeneration projects commissioned is:

Table 3.2
Biomass Power and Cogeneration Status

Projects commissioned 727 MW 109 projects
Biomass Power 290 MW 52 projects
Cogeneration 437 MW 57 projects
Projects under implementation 607 MW 76 projects
Biomass Power 284 MW 41 projects
Cogeneration 323 MW 35projects
6 MW biomass power project in Andhra Pradesh
Biomass Resource Assessment

The Ministry had undertaken Taluka level Biomass Resource Assessment Studies
during the 9th Plan with a view to assess biomass availability for power generation in
500 Talukas in the country. 475 studies have been completed in 23 States; A project
on Biomass Resource Atlas for India is being jointly undertaken by Indian Institute of
Science (IISc) and Regional Remote Sensing Service Centre (RRSSC), Bangalore to
integrate the data obtained from filed-level study on biomass assessment and inputs
from other sources likely Ministry of Agriculture, Government of India, etc.
Biomass Power /Cogeneration Programme
o Biomass power / Cogeneration programme has the following components:
Biomass Resource Assessment
Research & Development including Advanced Biomass
Gasification
Biomass/bagasse based cogeneration
Biomass based power generation
Industrial cogeneration
o The objective of this programme to promote technologies of cogeneration,
biomass combustion, MW scale gasification & Industrial Cogeneration for
generation of power and also to establish the techno commercial feasibility
and viability of power generation from biomass that are either wastage or
sub optimally utilised
o Biomass Conversion technologies include combustion, gasification, etc.
deploying gas/steam turbine, dual-fuel engine/gas engine, or a
combination thereof, either in power alone or in cogeneration (steam and

power) mode. Each plant will have a minimum eligible capacity of 1MW,
grid interfaced and/ or captive power projects (with or without surplus
power to grid)
o Following are the initiatives for acceleration of the biomass power/
cogeneration programme during 10th Plan Period:
Thrust to bagasse cogeneration in cooperative sugar mills.
Advanced Biomass Gasification for development of and
application of advanced technologies, such as Biomass integrated
gasification-cum-gas turbine combined cycle technology.
Promotion of industrial cogeneration for surplus power
UNDP-GEF biomass power project approved.
To promote MW scale projects with 100% producer gas engines
The following investment opportunities are open to investors for renewable
energy based power generation projects:
o Joint Venture: A foreign investor can enter into a Joint Venture not only
for manufacturing RE devices/products but also for setting up RE-based
power generation projects on Build, Own and Operate (BOO) basis.
Investors would be required to enter into a Power Purchase Agreement
(PPA) with the concerned State Government
o A foreign investor could enter into a Joint Venture with an Indian partner
who understands the local environment and could exploit the business

opportunities. A feasibility study of the projects could be done before
entering into such a venture. A Joint Venture is a preferable mode as it
provides maximum visibility and presence in the country
o R&D initiatives and thrust areas for technology development
MNES supports the following R&D initiatives and has identified them as thrust
areas for technology development by investors and technical institutions:
o High-pressure boilers and new turbine configurations
o Development of process systems and equipment for enhancement and
optimisation of power generation
o Development of cost-effective biomass handling, storage and drying
systems
o Feasibility of blending or co-firing of mix of biomass materials, or with
fossil fuels
o Indigenous technology development/adaptation for Advanced Biomass
Gasification (ABG) involving gas turbines in the combined cycle mode
Promotion of biomass-based power generation in the country is being encouraged
through enhancement of favourable policy regimes at the state as well as at the
Central levels. The state polices include Buy-back/wheeling/Banking of generated
electricity by the SEBs and fiscal incentives such as concessional custom duties;

exemption from excise duty and sales tax; tax holiday and accelerated
depreciation; and, soft loans are available for commercial projects.
Eligibility Criteria for Admissible Projects
MNES's eligibility criteria in the three areas are given below:
o For Bagasse/Biomass Cogeneration Projects: Bagasse, forestry and
agro-based industrial residues. Mix of conventional and/or non-
conventional fuel, up to 25 per cent only, allowed in both cases to achieve
extended operating days in a year
o Technologies: Any technology package such as Combustion/ Gasification,
through gas/steam-turbine, dual fuel engine/gas engine route or a
combination thereof, appropriate and efficient for power
generation/cogeneration as per the above biomass resources
o Capacity: The minimum eligible capacity shall be 1.0 MW; grid
interfaced and /or captive power projects (with or without surplus power
to grid)
Fiscal and Financial Incentives
The following information is given in appendix in detail:
o The details of Central Financial Assistance under the NBGP for various
items for different modes of applications - mechanical, electrical,
thermal/cooking.

o The numerous financial incentives and assistance packages under the
national programme
o Incentives such as interest subsidies for developers of biomass power and
cogeneration projects
o Fiscal incentives and concessions for investors in power generation
projects based on biomass
Biomass Gasifier Programme
The details of Biomass Gasifier Programme entailing the objectives, the eligibility
criteria, pattern of financial assistance / incentives for eligible projects and other
promotional activities, including the procedure for availing the said financial
assistance / incentives, are given in Annexures.
Implementation
The Programmes will be implemented through the State Governments, State Nodal
Agencies, and Financial Institutions involving Intermediaries, Industries, NGOs,
Panchayats, Co-operatives, ESCOs etc.
Pattern of Release of Central Financial Assistance (CFA) for Biomass Gasifier
Projects
i) CFA for Thermal Applications and Electrical Applications:
Capital subsidy shall be provided on satisfactory completion of project on
reimbursement basis through State Nodal Agencies for projects up to 3 MW
Thermal. No releases to be made alongwith sanction letter and upto completion of

the project. Certification of completion of the project to be provided through a
Joint Commissioning Report (JCR) by the State Nodal Agency, Manufacturer and
user beneficiaries /Organization alongwith documents providing necessary
technical and financial audited documents.
ii) Biomass Gasifier based Village Electrification:
The implementation will be done by / through SNA with the involvement of
ESCOs, Co-operatives, Panchayats, NGOs, Manufacturers or Entrepreneurs. The
CFA for the sanctioned projects will be released to the State Nodal Deptts. / SNAs
in the following manner:
Initial release of 20% of the total MNES cost share would be made alongwith the
sanction letter of the project.
Second instalment of 50% of MNES cost share would be released on supply of
equipment at site.
Third instalment of 20% of MNES cost share on erection and commissioning.
Final instalment of 10% on MNES cost share would be released after three
months of trouble-free operation of the whole system and submission of Audited
SOE & UC by the implementing agency
iii) Demonstration Programme for 100% Producer Gas Engines:
The Scheme will be implemented through State Nodal Agencies. The terms of
release of CFA shall be on the same pattern as per (b) (ii) above.
iv) Conversion of existing diesel power plants in North-Eastern Region and
others islands to Biomass Gasifier based Power Stations:

The Scheme will be implemented through State Power Departments/State Nodal
Agencies. The terms of release of CFA shall be on the same pattern as per (b)(ii)
above.
v) Financial Assistance for Promotional Activities:
The pattern of releases for promotional activities and for applied R&D Projects
would be determined on case-to-case basis, on merit.
Biomass-gasifier power plant
2.5 Energy from Wastes
Highlights
The quantity of wastes generated in class-I cities per annum is estimated to be
about 27 million tonnes of municipal wastes and about 4400 million cubic meters
of sewage.
In addition, large quantities of wastes are produced by industries, such as sugar
mills, distilleries, pulp and paper mills, dairies, slaughter houses, tanneries,

pharmaceutical industries, etc. These estimates translate into a potential for about
1000 MW equivalent of power from urban wastes and over 700 MW from
industrial wastes. From the ongoing exercise for preparing the National Master
Plan for Waste-to-Energy, the estimated potential is emerging to be over 2500
MW.
Waste-to-Energy is a "win-win" option as application of advanced waste
management practices and techniques helps not only to reduce the quantity of
wastes at source but also facilitates their treatment and disposal in environment
friendly manner besides helping in generation of a substantial amount of energy.
Waste-to-Energy technologies can help in reducing the total waste quantities by
50% to over 90%, which, in turn, can greatly reduce the demand for land, which
is already scarce in cities and the cost of waste transportation to far-away landfill
sites.
Even Globally, the Waste-to-Energy is emerging as a high priority subject in the
efforts for reducing Green House Gases Emissions and Climate Change related
initiatives.
Technological Options for Energy from Urban and Industrial Wastes
Anaerobic Digestion/Biomethanation
Landfill Gas Recovery
Incineration
Densification/Pelletisation

In addition to the above, there are some other conversion technologies such as pyrolysis,
gasification, alcohol fermentation, slurry carb process, plasma are technology etc.
Ministry's Initiatives
In view of the vast potential for recovery of energy from wastes and associated benefits
of waste-to-energy projects, the Ministry is implementing two programmes for the
recovery of energy from Urban & Industrial wastes. Some details of these programmes
are as follows:
1. National Programme on Energy Recovery from Urban and Industrial Wastes
o The National Programme aims at promoting efficient and proven
technologies for treatment, processing and disposal of waste, as a means
of improving the Waste Management Practices in the country besides
augmenting decentralised power generation. The scheme is implemented
through State Nodal Agencies, Govt. Departments, and Urban Local
Bodies who have to forward the project proposals to MNES in accordance
with a prescribed procedure for applying for Central Financial Assistance.
This scheme is applicable to both, private as well as public sector
entrepreneurs and investors having technical and managerial capabilities
for implementing such projects on the basis of Build Own Operate and
Transfer (BOOT), Build Operate and Transfer (BOT), Build Own and
Operate (BOO), Build Operate Lease and Transfer (BOLT).

o The Waste-to-Energy Programme of MNES has generated considerable
interest and activity in this sector and is expected to witness a quantum
jump in near future.
o A total of 5 projects:2 based on muncipal solid waste and one eash on
sewage,vegetable waste and starch industry solid waste were completed
and commissioned during the year 2003-04.
o The total installed capacity of these projects was 15.65 MW,thus making
the cumulative installed capacity of waste to energy projects in the country
to around 41.50 MW till 31.04.2004.
o The financial incentives being provided under the scheme are as follows:
Interest subsidy for commercial projects
Interest subsidy is provided for reducing the rate of interest to
7.5% (4% in case of projects taken up by Municipal
Corporations/Urban Local Bodies) subject to certain limits on
capitalised amounts for upfront payment to Financial Institutions.
Capital subsidy for demonstration projects
Financial assistance of up to 50% of capital cost of the project
limited to Rs. 3.00 crore per MW is available for innovative
demonstration projects for power generation from Municipal Solid
Waste and for selected Industrial Wastes.
Power generation at sewage treatment plants
Financial assistance of up to 50% of the incremental capital cost
for generation of power from biogas at STPs.

Other Incentives
Incentives are also provided to Urban Local Bodies and State
Nodal Agencies for promoting WTE Programme.
2. UNDP/GEF assisted project on development of high rate biomethanation
processes
o The project on Development of High Rate biomethanation Processes as a
means of reducing green house gases emission was started in September
1994. The project has the following key objectives:
To develop institutional framework at the National level to
generate necessary awareness and capabilities to provide impetus
to the Bio-energy Development Programme utilising high rate
biomethanation processes
To develop requisite expertise and capabilities in the national and
state level institutes, R&D organisations and universities to
assimilate and adapt technologies, improve applied R&D skills in
the field of high rate biomethanation processes, and to provide
technical know-how and assistance in setting up plants using
biomethanation processes
To promote the use of biomethanation technology and biogas
utilisation as cost effective means of energy generation through
demonstration sub-projects and national and local level seminars
and workshops, promotional campaigns, training and
demonstration

To develop a National Master Plan and a shelf of investment to
utilise this important renewable resource through
commercialisation of biomethanation processes.
o Major activities under this project are as follows:
Setting up of 16 demonstration sub-projects
Preparation of National Master Plan
Capacity Building
Publication of a quarterly newsletter 'Bio Energy News'
Industry Participation: Corporate bodies and large industrial groups must join hands
with R&D institutions and further develop these fully matured technologies. Criteria for
Eligibility of Projects for Financial Support
1. Criteria based on Wastes
o Projects based on any waste of renewable nature from Urban and
Industrial sectors are eligible under this programme. While rice husk,
straw, stalks, bagasse and fines of biomass origin are not covered under
this programme, mixing of urban or industrial wastes with other wastes of
renewable nature from Urban and Industrial sectors, including rice husk
and bagasse, as backup fuel or feedstock up to a maximum of 30 per cent
is permissible under this programme. Projects based on waste heat (flue
gases), wastes, residues or derivatives from non-renewable sources viz.
Coal rejects, dolochar, oil refinery waste etc. shall not be eligible.

o Projects for production of biogas from distillery effluents (spent-wash) are
not eligible under this programme. However, projects for power
generation from biogas being produced from Urban and Industrial wastes
(including distillery effluents), through biogas engines / turbines, dual fuel
engines using oil up to a maximum of 5% as pilot fuel, and steam turbines
with a minimum steam pressure of 42 bar shall be eligible.
In case of any violation of the conditions stipulated above by the project
promoters, within first five years of the project operation, the total subsidy
would have to be refunded to MNES. Decision of Secretary, MNES shall
be final n case of ambiguity or violation in respect of provisions of this
scheme.
2. Criteria based on Technologies
Projects based on conversion technologies namely, biomethanation, pelletisation (only
from urban waste), gasification, pyrolysis, incineration, combustion, sanitary landfilling,
etc, or a combination thereof shall be eligible under this programme. Power generation
through steam turbine route shall be permitted for a minimum steam pressure of 42 bars.
3. Criteria based on Capacity of Projects
1. Minimum capacities of waste-to-energy projects
Forms of Energy Minimum Capacity

Waste to Energy (In the form of fuel pellets) 15 TPD
Waste to Energy (in the form of biogas) 300 cu m /day
2.5 tonnes/hr at minimum
Waste to energy (in the form of steam)
Pressure of 20 bar
Waste to energy (in the form of Electricity) 25 Kw
2. Maximum capacity of waste-to-energy projects

Type of Projects Maximum Capacity

MSW based demonstration projects
5 MW
(two projects per state)
Industrial waste based demonstration
2 MW
Projects (two projects per state)
Note: Amount of subsidies would be determined on the basis of net output i.e. gross
installed capacity minus the auxiliary power consumption
The thrust areas in this sector are:
Biomethanation of mixed waste
Mixing of toxic or otherwise bio-chemically difficult wastes with simpler wastes to
improve amenability to anaerobic digestion (such as tannery/slaughterhouse wastes along
with animal waste/municipal solid waste (MSW)/sewage); designation of suitable
combinations in terms of microbial parameters and for actual projects in terms of site
specific availability; evolution of optimal digester designs along with their O&M routines
Performance enhancement of UASB reactors
Characterisation of different waste streams (such as distillery spent-wash, dairy waste and
food processing industry wastes), and corresponding O&M routines in the existing
Upflow Anaerobic Sludge Blanket (UASB) systems for optimal performance. Laboratory
and pilot-scale studies to understand the process of granulation and its application to
different waste streams
Municipal solid waste

Development of scientific landfills with gas recovery for Class-I towns with
population around 0.5 million
Case studies for cities where firm tie-ups for land, garbage delivery at site, and
biogas utilisation can be assured
Focus on towns, which have maximum potential in this area. Feasibility Studies
on non-landfill technologies such as RDF and scaling up of already existing plug-
flow digesters and gasification reactors
Efficient energy recovery through upstream processing
R&D on removal of inhibitory and toxic components of waste upstream of the energy
recovery system to improve the system efficiency. R&D on removal of lignin from black
liquor in paper industry. Processes for chromium removal in leather industry effluents
End-use reliability through downstream processing
Examination/quantification of effect of biogas recovered from industrial waste on
the life of the engines or the combustors (particularly due to H2S content of the
biogas)
Technologies for biogas purification. Treatment and safe disposal of effluents
after energy recovery for different waste streams
Monitoring of existing plants and sub-projects completed under UNDP/GEF
assisted biomethanation programme
Study of the performance data on completed plants/sub-projects to diagnose the design
and O&M parameters leading to expected efficiencies. Identification of operational

problems, if any/areas requiring further R&D efforts. Evaluation of degree of success of
the sub-projects in the field .
Support from the State Government
State Governments of Uttar Pradesh, Madhya Pradesh, Punjab, Rajasthan, Kerala, Tamil
Nadu, Andhra Pradesh, Maharashtra, Haryana and Karnataka have announced policy
measures pertaining to allotment of land, supply of garbage and facilities for evacuation,
sale and purchase of power to encourage setting up of Waste-to-Energy projects. Efforts
are being made to persuade other State Governments to announce their policy guidelines
to encourage setting up of waste-to-energy projects in their respective States.
Implementation Arrangements
The scheme is implemented through SNAs, government departments, and urban local
bodies who have to forward the project proposals to MNES in accordance with a
prescribed procedure for applying for Central financial assistance. This scheme is
applicable to both private as well as public sector entrepreneurs and investors having
technical and managerial capabilities for implementing such projects.
The scheme is implemented after MNES approves initial project profiles that have been
submitted. Financial support required to recover energy from wastes will also be granted
on application though project profiles, and is applicable to both private and public sector

entrepreneurs and investors having technical and managerial capabilities for
implementing such projects on the basis of
Build, Own, Operate and Transfer (BOOT)
Build, Operate and Transfer (BOT)
Build, Own and Operate (BOO)
Build, Operate, Lease and Transfer (BOLT)
Chapter III
3.1 Solar Photovoltaics
Highlights
There are about 300 clear sunny days in a year in most parts of India. This is equal to
over 5,000 trillion kWh/year, which is far more than the total energy consumption of the
country in a year
The daily average solar energy incident over India varies from 4-7 kWh/m2,
depending upon location
SPV systems have found applications in households, agriculture,
telecommunications, defence, and railways among others. In the last two decades,

the cost of PV has gone down significantly, increasing affordability for dispersed
rural applications
Costs are expected to reduce further thus creating more demand
About 66 MW aggregate capacity (about 10,80,000 individual PV systems and
power plants) have been installed for various applications. In addition, PV
products of 55 MW aggregate capacity have been exported
A number of SPV systems have been installed in various parts of the country
during the year. The number of systems installed so far under the programme is as
follows.307, 763 home lighting systems, 52,102 street lighting systems, and 5,000
water-pumping systems. About 1,791.31 KWp of aggregate capacity of stand-
alone and grid-interactive PV power plants have been installed as on March 31,
2004.
Lighting systems, stand-alone power plants and other specialised systems,
implemented mainly through SNAs/departments/corporations, 'Aditya' solar shops
operated by Manufacturers' Associations and NGOs
Water-pumping systems for agriculture and related uses, implemented through
IREDA and SNAs
Aims and Targets
An all India SPV programme to develop cost-effective PV technology and its applications
for large-scale diffusion in different sectors, especially in rural and remote areas is under
implementation by MNES. Major components of PV programme include:
R&D

Demonstration and utilisation
Testing and standardisation
Industrial and promotional activities
Thrust Areas of R&D in SPV
Following is a list of some of the priority areas for research support in SPV technology.
Materials and Devices
Development of crystalline silicon thin film layers and low-cost substrates for
deposition of films
Development of large size solar cells/modules based on crystalline silicon thin
films
Development of multi-junction amorphous silicon solar cells/modules; pilot plant
demonstration
Development of process technology for polycrystalline thin film solar
cells/modules; pilot plant demonstration
Development of devices based on new materials/concepts
Improvement in solar cell efficiency to 14-15 % at commercial level and greater
than 20 % at research level
Improvements in PV module technology, higher packing density, suitability for
solar roofs, etc
Development of light-weight modules for use in solar lanterns and similar
applications

Child studying using solar lantern
Applications
Improvements in system design for PV lighting systems, including development
of a new design of electronics used in solar lanterns
Development of high efficiency inverters, charge controllers and power
conditioning units
Development of spill-proof tubular plate lead acid batteries
Development of maximum power point trackers
Development of high efficiency motor pumps and water pumping systems
Development of integrated power conditioning units
Development of new PV systems
Reliability studies on crystalline silicon, amorphous silicon modules and other
type of PV modules

Performance evaluation studies on solar lanterns, domestic lighting systems,
power plants, PV pumps and other type of systems for system design
validation/improvements
Development of solar roof systems and electronics used in solar roof systems
PV Products
Solar lanterns, home lighting systems/solar home systems, street lighting systems, stand-
alone PV power plants, refrigerators for medicines and vaccines, solar PV water-pumping
systems for agriculture and related uses, and other applications of PV technology,
including new applications.
Specifications of SPV Systems
Indian standards for PV modules and other related aspects have been developed. Most
standards are in line with the relevant International Electro-technical Commission (IEC)
standards. MNES has drawn specifications for the purchase of solar lanterns, solar home
systems, street lighting and solar water pumping systems under its capital and interest
subsidy programmes.
Testing Centres and Certification
The Solar Energy Centre (SEC) in Gurgaon, Haryana, is the lead SPV training and test
centre set up by MNES. There are three test centres that have been authorised to test solar
lighting systems like solar home systems, solar street lighting systems and solar lanterns.

It is mandatory for manufacturers/suppliers to obtain a test certificate from an authorised
test centre for the testing and certification of solar home systems, and street lighting
systems and solar lanterns for supply under the MNES programme. Standards for solar
generators and BIPV are being evolved.
Solar Lighting Systems
Non-grid applications in solar PV include solar lanterns, home, community and street
lighting systems, water pumping for agricultural and related uses, stand-alone power
plants, solar generators, solar powered refrigerators for remote health centres or clinical
uses. These technologies make the benefits of electricity availability in remote,
inaccessible areas. Some of these systems are covered under the subsidy programme of
the Ministry. The details are in appendices.
Solar Water Pumping Systems
MNES has been implementing through IREDA and SNAs, a programme on deployment
of SPV water pumping systems for agriculture and related uses, with the objective of
development of marketing infrastructure and obtaining direct feedback on their
performance and utilisation, for meeting specific needs of the users in different agro-
climatic conditions. MNES provides an interest subsidy on the loan component given by
IREDA. The details are in appendix, "Financial Incentives".
SPV Power Programme

During the tenth five-year plan, the Ministry proposes to establish a SPV power capacity
of 5 MW for "niche" applications, viz., voltage stabilisation at the tail-ends of rural grids,
centralised system for peak shaving or demand side management in urban centres and
diesel saving in island/remote locations.
The manufacturers of solar cells and modules can implement the project by entering into
a suitable power purchase agreement (PPA) with the SEBs. MNES also encourages the
industry and private sector to set up grid interactive SPV power projects.
Opportunities exist in all the major thrust areas as listed above under "Major
Thrust Areas".
Joint ventures with global PV manufacturers
Setting up manufacturing plants as 100 per cent Export-oriented Units (EOUs)
Technology transfer for PV modules especially based on thin film materials
R&D
Joint Ventures
A number of companies have entered into joint ventures with leading global PV
manufacturers. There are no specific conditions laid down by MNES for the formation of
joint ventures. General conditions laid down by the Ministry of Industry, Secretariat for
Industrial Approvals and the Reserve Bank of India are applicable for this sector.

Export-oriented Units
It is possible to set up a manufacturing plant as a 100 per cent EOU. Generally, these are
permitted duty-free import of raw materials and components. They are also eligible to sell
up to 20 per cent of their production in domestic markets.
Technology Transfer
Indian PV industry is interested in seeking technology for the manufacture of PV
modules especially based on thin film materials, and is able to offer technology for the
manufacture of silicon solar cells, PV modules and PV systems.
Technology Development
R&D projects are supported by the government at Central/state government research
organisations, autonomous societies, universities, recognised colleges, IlTs, industries
(with suitable infrastructure for R&D) and NGOs.
Financial Assistance
The details of financial incentives available from MNES are given in appendices.
Rs 1 lakh is offered for the preparation of a DPR for the grid-interactive SPV
power project. In addition, MNES provides 2.5 per cent of its share of project
cost, subject to a maximum of Rs 5 lakh for performance evaluation, monitoring,
report writing, etc, to the SNA.

3.2 Solar Thermal
Highlights
One of India's first and among the largest in the world, the 140 MW Integrated
Solar Combined Cycle (ISCC) with a solar thermal component of 35 MW Power
project at Mathania near Jodhpur in Rajasthan has been sanctioned. The solar
thermal component is based on the parabolic trough collector technology. The
combined cycle power plant of 105 MW capacity will be run on conventional fuel
Non-grid solar thermal technologies include water heating systems, solar
cookers, solar drying applications and solar thermal building designs. These
technologies on the other hand help conserve energy in heating and cooling
applications, especially in urban and semi-urban environment
Solar Water Heating: Around 700,000 sq. m collector area for water heating has
been installed. Solar water heating systems are now being manufactured on a
commercial scale at around 1,00,000 sq. m collector area annually. There are
more than 70 manufacturers approved by BIS
Solar Cookers: Over 5,41,000 box solar cookers have been sold in India since
the inception of MNES. There are about 30 manufacturers of these solar cookers.
Concentrating type solar cookers are also being installed under a demonstration
scheme. These include Dish Solar cooker, community cooker for indoor cooking
and solar steam cooking system. The world's largest solar steam cooking system
has been installed at Tirupathi, Andhra Pradesh, which cooks food for 15,000

people per day. About 15 manufacturers are involved in manufacturing and
supplying of different types of concentrating solar cookers
Solar Air Heating: Solar heating systems comprising over 5,000 sq. m collector
area has been installed in India. Most of these systems are installed in industrial
and agricultural sectors of the country having conventional drying units.
Integration of the solar system with their existing system has helped them in
saving large amount of fuels besides reducing environmental pollution.
Solar Buildings: A Solar Buildings Programme to promote solar-efficient
building designs in the country is being implemented by MNES with the
following components: training and education; demonstration and promotional
programmes.
o A number of buildings based on this concept have been designed and
constructed
o Financial assistance is available from MNES for construction of solar
efficient buildings of Government and semi-government sectors under the
demonstration programme.
o Solar Thermal Demonstration Programme: To promote other solar thermal
technologies, a demonstration programme is being implemented by the
Ministry on cost-sharing basis.

A 200 litre per day solar water heating system installed in Karnataka by IREDA.
Solar water heaters, solar cookers and solar dryers are priority areas for meeting
heat energy requirements of different applications in the domestic, commercial,
and industrial sectors. Soft loans are available for promotion of these applications.
Over 700,000 sq. m of solar water heating collectors, which could heat more than
35 million litres of water to a temperature of 60-70 C every day, have so far been
installed in the country. Hot water applications are in the sectors of:
o Individual residential and apartment buildings
o Restaurants and canteens
o Guest houses, lodges, hotels and hostels
o Hospitals and nursing homes
o Boiler feed water for commercial and industrial applications
o Process feed water for paint industry, electroplating, galvanising industry,
etc
o Bottling plants and distilleries for syrup making, bottle cleanings, etc
o Pharmaceutical, chemical and fertilizer industries

o The textile industry
o The food processing industry
Standardisation and Quality Control
To ensure quality and performance of the systems, the Indian National Standards on solar
flat plate collectors and solar cookers have been brought out by the Bureau of Indian
Standards (BIS). Revised standards on solar water heating collectors and for solar
cookers have been published.
BIS approval (ISI mark) is compulsory for any solar water heating system to be installed
under projects seeking soft loan from the commercial banks or IREDA.
Apart from the Solar Energy Centre, six Regional Test Centres established by MNES in
different parts of the country, test solar collectors and cookers and provide technical
backup services. These Centres also act as technical back-up units under the solar thermal
energy programme, besides conducting a number of training programmes.
There are now more than 70 BIS-approved manufacturers at present, with a production
capacity of more than 2,00,000 sq m collectors per year. The annual sale of solar
collectors is estimated at around 1,00,000 sq. m. Export of solar collectors and systems
has also commenced.

World's largest Solar Steam Cooking System at Tirupathi in Andhra Pradesh
Aditya Solar Shops
Solar shops called 'Aditya' are being established in different parts of the country to
promote spot sale of different RE products, servicing and repair of the devices, and
dissemination of information. There are currently 48 such shops. MNES provides a one-
time grant for setting up of these shops, besides some grant for publicity. These shops can
be established in private as well as public sectors through State Governments. Some
shops are also being established directly by State Governments at their own
lands/buildings.
Policies and Incentives
Incentives for Solar Water Heating
IREDA has changed its financing norms for solar thermal systems. The repayment
period for loans has now been made 6 years including moratorium period. The
minimum promoters contribution for such loans is 20%.

The rate of interest for loans to end users in the commercial category through
IREDA has been reduced to 7% from 8.3%.
Under the new schame, Banks have been authorized to finance solar water heaters
without any upper limit to the capacity of the system. The subsidized rate of
interest is 5%.
Many state governments are also pursuing this programme by offering various
incentives
Details of the soft loan programme on solar water heaters through IREDA and
commercial banks are given in appendices.
Incentives for Solar Cookers
Financial support is provided to SNAs for promotional activities such as publicity,
cooking demonstrations/competitions, training, development of marketing
network and repair/servicing facilities at sales outlets, etc. and also towards their
service charges. This support is linked with actual sale of box-type solar cookers.
Provision has also been made to provide support to reputed
NGOs/Universities/Institutions/Registered Test Centres for promotional activities
based on specific proposals received from them
Incentives are also offered to their associated promoters such as manufacturers,
SEWs (self employed workers), NGOs etc for selling cookers through their own
efforts. SEW's earn a living by repairing and servicing of solar cookers also at the
doorsteps of users

Under a loan scheme of MNES, interest-free loans are given to users for purchase
of solar cookers through a few commercial banks
Financial support up to 50% cost is available to beneficiaries for installation of
concentrating type solar cookers including steam cooking systems under a
demonstration scheme.
Financial support is made available to manufacturers for taking BIS approval on
their products
In order to encourage SNAs to take up large-scale promotion of solar cookers in
their respective states, MNES has instituted an annual award for the best
performance
Incentives for Aditya Solar Shops
Non-recurring and recurring grant for establishment of shops owned by State
Governments/Agencies
One time grant for private shops/solar counters through State Governments
Support for publicity of shops to State Governments
Details of incentives available for solar cookers and Aditya Solar shops may be seen in
appendix.
3.3 Stand-alone Wind Energy and Hybrid Systems

Hybrid and Stand-alone Systems
Hybrid Systems
For reliable supply of power in remote locations or inaccessible rural areas it is possible
and sometimes necessary to design and set up hybrid system which combine the
advantages of two different energy technologies. These could be either two renewable
technologies or a renewable and a conventional energy or fossil technology - a RE system,
say PV or wind, to take care of base load requirements and the conventional systems (say
diesel generator) to supplement for peak load requirement. An integrated hybrid system
would ensure that power supply could be maintained at an optimum level during cloudy
days (for PV system) or low wind conditions (for wind electric generators). MNES and
IREDA provide financial assistance for some of the hybrid systems (see appendix).
Stand-alone Wind Technologies
While grid-connected power generation from wind is a focus area for MNES, incentives
are available for other applications of wind energy such as water pumping windmills and
wind battery chargers. The terms of the financial incentives are given in appendix.
Chapter IV
4.1 Biogas

Highlights
The main programmes under the Rural Energy are Biogas (including community,
institutional and the night soil-based programme), Improved Chulhas (Cookstoves) and
the Integrated Rural Energy Programme (IREP)
The national project on Biogas Development (NPBD) was launched in 1981-1982
to promote family size biogas plants in rural areas
The objectives of NPBD are to:
o provide fuel for cooking purposes and organic manure to rural households
through biogas plants
o mitigate drudgery of rural women, reduce pressure on forest and
accentuate social benefits
o make available enriched fertiliser as a by-product for supplementing and
optimising the use of chemical fertilizers
o improve sanitation in villages by linking toilets with biogas plants
Both floating-drum and fixed-dome models are being promoted. Nearly 3.37
million plants have been installed till date, which is nearly one-fourth of the
estimated potential of 12 million plants
A large manufacturing industry for biogas equipment such as stoves, burners and
lamp mantles exists in India
Manufacture of biogas burners

Manufacture of high quality biogas lamps
Production of dual-fuel and biogas engines
Incentives for Biogas
Special incentives are available for turnkey entrepreneurs in rural areas to carry
out biogas installation and maintenance as a commercial venture. Over 500 such
entrepreneurs are currently operating
Besides dedicated nodal departments and nodal agencies, Central agencies such as
the Khadi and Village Industries Commission (KVIC) also promote NPBD.
National- and regional-level NGOs are also involved
Commercial and cooperative banks provide loan for setting up of biogas plants
under Agricultural Priority Area
National Bank for Agriculture and Rural Development (NABARD) is providing
the facility of automatic refinancing to banks
Turn-key job fee is given to entrepreneurs, service charges is provided to
SNDs/SNAs for training and publicity are also supported
There are Biogas Development and Training Centres functioning in nine major
states, to provide technical and training back-up to SNDs and SNAs
4.2 Energy-efficient Wood-burning Cookstoves or Improved Chulhas
Highlights
Improved chulhas are scientifically designed for optimal regulation of heat flow
and better fuel utilisation

A variety of smokeless efficient chulhas have been popularised to conserve fuel
wood and reduce indoor air pollution
The National Programme on Improved Chulhas (NPIC) is under consideration for
transfer to the State Sector
Manufacture of portable metallic chulhas
Manufacture of various chulha components
Maintenance and service
4.3 Integrated Rural Energy Programme
Integrated Rural Energy Programme (IREP) aims at developing micro-level
planning and implementation capabilities for promotion of an optimum mix of
both conventional and non-conventional energy sources in selected blocks in the
country.
The objectives of IREP are to:
o provide the minimum domestic energy needs of cooking and lighting in
IREP Blocks
o provide the most cost-effective mix of various energy sources and options
to meet the requirements of sustainable agriculture and rural development
with due consideration to environment
o develop capabilities in states/UTs for preparation and implementation of
Block-level energy plans and projects

o ensure large-scale people's participation in the planning and
implementation of IREP through the involvement of panchayats, voluntary
organisations and institutions at the micro level
o set up and strengthen the mechanisms and coordination arrangements for
linking micro-level planning and rural energy and economic development
so as to ensure regular and planned flow of energy inputs for meeting the
requirements of various end-users in the IREP projects
Biogas Plant
Incentives Available
Financial support for IREP has two components:
Central Sector Component

The Centrally Sponsored Scheme provides grants-in-aid to partially meet the cost
of supporting staff in the IREP project cells at the state and block levels, training
of the staff and extension work
State Sector Component
State Sector outlays are utilised for the implementation of IREP block energy
plans and projects including funding of demonstration activities, financial
incentives for various energy devices, extension and other related activities and
mobilisation of resources from other ongoing schemes and programmes for
energy and rural development in the IREP Blocks
Chapter V
New Technologies
5.1 Emerging Renewable Options

Besides solar, wind and biomass, there are other eco-friendly and renewable sources from
which energy can be tapped for varied applications in India. These are:
Chemical Sources of Energy - Fuel Cells
Hydrogen Energy
Alternative Fuel for Surface Transportation - Battery operated Vehicles
Geothermal Energy
Ocean and Tidal Energy
Biofuels
5.2 Chemical Sources of Energy - Fuel Cells
Highlights
The focus is on the development and applications of fuel cell technology to generate
electricity, through reaction between hydrogen and oxygen
Because of the modular nature, fuel cells are ideally suited for decentralised power
generation
Hydrogen is the primary fuel for fuel cells
Other fuels can also be used to produce hydrogen gas with the aid of reformers
Potential applications of fuel cells are:
Production of electricity, water and heat for various end-uses
Industrial uses

Surface transportation
Residential applications
Power supplies for personal computers, hospitals, health clinics, etc
Electrification of remote locations and villages
Thrust Areas
R&D in fuel cell technology specifically in the areas of material and stack
development, and performance improvements
Research in materials, technology development and upgradation in the area of fuel
cells
Production of fuel cells at affordable prices
Applications of fuel cell technology
Creation of infrastructure to support production and applications of fuel cells
Ongoing Projects
Development of 1 kW solid oxide fuel cell power pack
Preparation and characterisation of new polymeric membranes for protonic and
lithium ion transport to be used in chemical sources of energy
Development of 250 W direct methanol fuel cell stack
Construction of an improved 100 W solid polymer electrolyte-direct methanol
fuel cell
Proton exchange membrane fuel-cell based UPS system

Design of polymer membranes for fuel cell and battery applications
Optimisation of PEMFC stack design using advanced computational techniques
5.3 Hydrogen Energy
Highlights
Hydrogen as a clean fuel and energy carrier, can be used in a broad range of
applications as a possible substitute to fossil fuels
Support for R&D projects for the production, storage and applications of
hydrogen for power generation and transport sector as well as training and
manpower development is available
Hydrogen-fuelled fuel cells, two wheelers and catalytic burners have been developed
and demonstrated.
Hydrogen motorcycle developed at Banaras Hindu University, Uttar Pradesh
Thrust Areas

Research on materials, technology development and upgradation in the area of
hydrogen energy
Production of hydrogen by environmentally benign methods at affordable prices
Applications of hydrogen as a fuel
Creation and expansion of infrastructure
Awareness building
MNES also supports projects on utilisation of hydrogen as a fuel for stationary as well as
mobile applications.
Ongoing Projects
There are several research, development and demonstration projects in Hydrogen energy.
Hydrogen is receiving worldwide attention as a clean fuel and energy storage medium for
various applications. The ongoing projects supported by MNES include:
Hydrogen energy R&D activities and analyses for application and
commercialisation
Development of low-polluting hydrogen-diesel dual-fuel engine
Development of hydrogen storage device with Indian Mischmetal Laves phase
AB2 alloys
Development of novel metal hydride reactor for environment-friendly energy
conversion devices
Demonstration of hydrogen fueled two-wheeler road transport
Biological hydrogen production
Hydrogen production through bacterial route employing bagasse

Compressor driven metal hydride cooling and heating systems
5.4 Geothermal Energy
Highlights
Geothermal resources are used to generate power and heat for space heating,
greenhouse cultivation and cooking applications.
There are more than 300 geothermal spring sites spread throughout the country.
The National Geophysical Research Institute (NGRI), Hyderabad, has conducted
magneto-telluric investigations in Tattapani Geothermal fields in Chhatisgarh to
identify sub-surface geological structures to evaluate its energy and thermal
potential. Based on the promising results obtained during the investigations, it is
planned to develop the site for power generation. A similar study has been carried
out through NGRI in Puga Geothermal Fields in Ladakh region of Jammu &
Kashmir and the site is planned to be developed for power generation.
Thrust Areas
Resource assessment and creation of a database on infrastructure for indigenous
production of geothermal power plants and equipment for deeper drilling of bore
holes
Applications of geothermal energy for power generation and direct heat
utilisation, viz., cooking, bathing, space heating, etc
5.5 Alternative Fuels for Surface Transportation

Highlights
In recent years, vehicle manufacturers have taken interest in this area spurred by
the increasingly stringent fuel emission norms
Through its demonstration programmes, MNES has been gathering feedback on
the electric vehicle performance, operation and maintenance and infrastructure
requirements
Reva, the electric car manufactured in Karnataka
Thrust areas
R&D on eco-friendly electric and alternate energy/hydrogen energy vehicles
R&D on advanced high energy density batteries for electric vehicles
R&D on material/technology development, performance improvements, cost
reduction, etc
Ongoing Projects

Development of lithium ion secondary batteries
Development of high energy lithium polymer electrolyte batteries of 1 Ah
capacity with a cycle life of 350 for vehicular traction
Development of novel route synthesis, characterisation and electrochemical
studies of high quality cathode materials for lithium batteries
Preparation and characterisation of carbonaceous composite materials for ultra
capacitors
Development of solid electrolyte materials for electrochemical double layer super
capacitors
Development of conducting polymers based super capacitors
Pilot project for demonstration of 300 nos. of battery operated three-wheelers in
different cities
5.6 Biofuels
Highlights
In view of the worldwide demand for energy and concern for environmental
safety, there is a need to search alternate fuels to petrol and diesel for their use in
automobiles and other petrol and diesel engines
Ethanol, and other biofuels are being increasingly looked at as a potential fuel for
running automobiles and other engines
Ethanol and other biofuels when used as a blend with gasoline and diesel enhance
the combustion of the fuel, conserve fuel and improve urban air quality by
reducing emissions of green house gases

Besides ethanol, biodiesel extracted by trans-esterification of non-edible oils e.g.
Jatropha Curcas, Karanje, Honge etc. have great potential to be used as an
alternative to diesel in diesel driven vehicles and engines
Oil bearing seeds from jatropha curcas (for bio-diesel production) plantation in Hissar,
Haryana
Thrust Areas
Identification and characterisation of different petro crops
Development of technology for converting different vegetable oils to bio-diesel
Field trials on use of vegetable oils as transport fuels
Exploiting various routes of ethanol production including biomass, sugarcane
juice, degraded foodstock etc.
Manpower development/publicity/awareness/documentation
5.7 Ocean Energy
Highlights

Tides, Ocean Thermal Energy Conversion, Ocean Waves and Ocean currents are
different forms of Ocean Energy
With the present status of technology only tides can be harnessed commercially to
produce power
Potential sites in India are:
o The Gulf of Kutch and the Gulf of Khambat (Cambay) in Gujarat on the
western coast
o Durgaduani Creek in Delta of Ganga in Sunderbans area of West Bengal
on the eastern coast
Based on the preliminary assessment of the potential of Durgaduani Creek, a Detailed
Project Report has been prepared for a 3 MW tidal power project in Sundernbans area of
West Bengal. An Environmental Impact Assessment Study is being undertaken to assess
the Environmental impact of the proposed plant before taking a final view on the project.
Chapter VI
CONCLUSION

Business Opportunities
Indian and foreign investors can contribute to technology development, manufacture and
export of various RE systems and devices. Some of the specific areas include:
Technology import or collaborations for:
Manufacturing low cost solar photovoltaic cells/modules
Processing and constructing treatment plants for municipal solid waste using
technologies that can recover resources and energy - high efficiency
biomethanation, pelletisation, gasification, incineration and landfill
Advanced technologies for treatment of, and energy recovery from, industrial
effluents and sewage wastewater
Fluidised bed biomass gasifiers using a variety of biomass for electrical,
mechanical and thermal applications
Fuel cells and electric vehicles
Requirement for specialised entrepreneurs to provide services for RE projects on a
short-/long-term contract for:
Marketing and sales
After-sales service
Operation and maintenance (O&M)
Renovation and modernisation
Managerial expertise

Opportunities for enhancing manufacturing capacity of different end-use
applications of RETs through:
Low-cost, proven RE devices and systems produced on a mass scale
Biomass gasifiers for providing electricity and as prime mover in rural areas
Small capacity wind electric generators
Standard SPV power packs for supply of electricity in private buildings
Stand-alone systems and hybrid systems
Existing Capabilities
With a strong industrial base and successful commercialisation of technologies in wind,
SPV, solar thermal, small hydel, biogas and improved biomass stoves, India is in a
position today to offer 'state-of-the-art' technology to other developing countries and play
a leading role in the global movement towards sustainable energy development. Besides
looking for investment, India can assist other countries in the following areas:
Wind Energy
Indian organisations and institutions have developed expertise in:
Wind resource assessment
Wind farm planning, design and development
Wind energy policies
A Centre of Wind Energy Technology (C-WET) has been established in Chennai as a
specialised institution in this field.

Small Hydro Power
India has well-established institutional capabilities for providing consultancy services in:
Planning, investigation and hydro resource survey
Engineering designs for construction of SHP projects
Techno-economic analysis of SHP, including renovation of old plants
Preparation of pre-feasibility and feasibility reports
DPRs for SHP projects
Design, manufacture and installation of improved water mills.
Biomass Production and Gasification
Several Indian organisations have the capability and expertise in various areas of biomass
related technologies - development and management of energy plantations, project
development and installation of biomass gasifier systems. These organisations are
exporting indigenously developed biomass gasifiers, as well as offer training and
technical assistance in these areas.
Solar Photovoltaics
India has a strong manufacturing base for solar cells/modules and systems. It can provide
consultancy services in setting up of manufacturing units and projects in rural
electrification, water pumping, SPV power plant, refrigeration, training, testing and
evaluation. There are a large number of institutions and professionals providing
consultancy in this vital area of RE.

Solar Thermal
India, as one of the pioneers in the area of solar thermal technologies, has the competitive
edge in terms of prices when compared to other international players providing renewable
energy equipment and services. Professional services are available in areas of:
Solar hot water systems and solar cookers
Resource assessment, monitoring, and applications
Design, manufacture and installation of systems
Solar Water Heaters: Indian solar thermal collectors (Flat plate type) and selectively
coated absorbers are now of internationally accepted quality. The manufacturing base is
well established. Indian manufacturers can export solar thermal collectors, selectively
coated absorbers and complete solar hot water systems to any country at competitive
price. India can provide assistance in setting up manufacturing facility, consultancy and
technical assistance to any country in this area.
Solar cookers: The Indian box-type solar cookers are the best in the world in both
performance and efficiency. There are number of solar cooker manufacturers in the
country. India can provide training, consultancy and technical assistance to other
developed and developing countries in the area of solar cookers.
India has developed an extensive base to manufacture high quality chulhas

Biogas
India has a large manufacturing base in biogas related technology. These include:
Various types of biogas plants
Biogas stoves and lamps
Gas distribution pipelines, fittings and accessories, including gas valves and
pressure regulators
Dual-fuel engines
Bag digesters made of rubberised nylon fabric
India has well-equipped institutions which organise training courses and provide
technical assistance to technicians of other developing countries who can then fabricate
and install biogas plants.
Chapter VII

References
Reports: Annual Reports
1. Ministry of Non-conventional Energy Sources, Government of India
2. Indian Renewable Energy Development Agency (IREDA)
3. Ministry of Power, Government of India.
Journals
1. Renewable Energy World (bimonthly), James & James (Science Publishers)
Ltd.
2. Solar Industry, International Solar Energy Society.
3. Power line
Websites
Websites of various government departments, ministries and organisations can be seen at
www.nic.in
Govt of India and Ministries: MNES <mnes.nic.in>, Min of Industry <indmin.nic.in>,
Ministry of Finance <finmin.nic.in>, Ministry of Environment & Forests <envfor.nc.in>,
IREDA <ireda.nic.in>

Institutions/Agencies:
IREDA, SIA, NSIC, HUDCO, ICICI, IDBI, IFCI, ILFS.
NGOs/International Agencies:
TERI <www.terin.org>, CREST<www.solstice.crest.org>, NREL<www.nrel.org>,
DOE<www.eren.doe.org> , World Bank <www.worldbank.org>, UNDP
<www.undp.org> WRI <www.wri.org>, Worldwatch <www.worldwatch.org>. PV Portal:
<www.pvportal.com>

ANNEXURE- I
Ministry of Non-conventional Energy Sources
The Prime Facilitator
The focus of the RE programme in India in the first decade was on direct use of RE
systems, promoted through the use of direct subsidy and decentralised energy use. This
technology centric focus and subsidy driven programme involved dissemination of large
numbers of energy devices, mostly cookstoves and biogas digesters. While this achieved
the desired quantitative results, clearly it was not sustainable. Importantly, it did not help
mainstreaming of the RE sector nor did it support private sector involvement.
Based on the lessons learnt, the shift in the RE programme in the 1990s was towards
market development and a much needed and sharper focus on commercialisation. Direct
subsidies continued, but the RE programme introduced initiatives whereby RE for
electricity generation was encouraged, and a new set of fiscal and financial incentives
were promulgated to bring in greater private sector participation. RE also found greater
regulatory and policy support through a slew of incentives from state governments, who
were keen to support greater private-public partnership in the unbundling of the
electricity sector. While the experience has been mixed, it can be argued that by and large
these efforts were in support of greater commercialisation of what was clearly a new
sector, and that several important milestones have been achieved, as detailed in the
following pages.

Key Activities of MNES
MNES is the nodal ministry for all matters relating to non-conventional and renewable
energy. The key functions include:
Policy-making and planning
Programme formulation and implementation
R&D
Technology development and commercialisation
Promotion of demonstration, pilot projects and extension programmes
Implementation of fiscal and financial incentives
Human resource development
Training
Promotion of Intellectual Property Rights (IPR) protection, international
cooperation, consultancy services and coordination
International cooperation
R&D Thrust Areas of MNES
MNES has identified thrust areas in which R&D efforts are required. It considers R&D
proposals, which are directly related to these activities or programmes of the Ministry and
hold promise for commercialisation in the near future. MNES has constituted an R&D
Advisory Committee comprising eminent persons in the field of RE, research, industry,
academic institutions, etc, that evaluates and clears R&D projects submitted to the
Ministry for financial support.

Institutions of MNES
Programmes for dissemination of RETs are implemented through SNAs.
Administratively, the SNAs are under the control of the respective state governments, but
they receive financial support from MNES for programme implementation. MNES also
implements certain programmes through NGOs. In 1987, MNES established an
autonomous financial institution - the Indian Renewable Energy Development Agency
(IREDA), in order to promote RETs on a commercial basis.
There are three organisations under MNES for technology development, testing and
certification of RE systems:
Solar Energy Center (SEC), Gurgaon, Haryana
Centre for Wind Energy Technology (C-WET), Chennai, Tamil Nadu
Sardar Swaran Singh National Institute of Renewable Energy (NIRE), Jallandhar,
Punjab
MNES has nine regional offices in different state capitals, besides a network of
autonomous organisations, NGOs, R&D and financial institutions and private
entrepreneurs. These regional offices monitor, supervise, and create awareness; liaise
with state agencies, NGOs, and project promoters; and provide feedback from the field.
There are nodal agencies of MNES in each state and UT which implement MNES
programmes in each state.

Solar Energy Centre
The Solar Energy Centre (SEC), as a part of MNES, undertakes activities related to
design, development, testing, standardisation, consultancy, training and information
dissemination in the field of solar energy. The Centre has been playing a crucial role in
promoting solar energy technologies in the country, providing technical information,
carrying out support activities, such as testing and demonstration, and building
information and databases for the National Solar Energy Programme. Equipped with
highly advanced and unique facilities, the Centre is recognised as a leading institution in
India and South Asia. Besides testing and standardisation of solar devices, its capabilities
span optimum system designing, evaluation and assessment of emerging technologies,
specialized training in repair and maintenance, and technical expertise for actual
installation of systems.
Objectives
The main objectives of SEC are:
To act as a National test and standardisation Centre for Solar materials,
components and systems
To take up joint collaborative research projects with other research institutions
and industry
To provide Advisory and Consultancy services to industry and users
To promote solar passive architecture
Solar radiation resource assessment in the country

To organise training courses, workshops, conferences and to bring out technical
brochures
To participate in / coordinate bilateral and multilateral projects
To undertake systems design, engineering and prototype development
To evaluate new and improved technologies/products/systems to assess their
adaptability to Indian conditions
Achievements
Development of National Standards for testing of solar collectors and box type
solar cookers
Establishment of Solar Thermal Test Facility for certification and developmental
testing of solar thermal devices and systems
Establishment of Solar PV Test Facility for testing of solar cells, PV modules, and
PV systems (viz. Solar lanterns, home/street lighting systems, PV refrigerators,
PV pumps etc.)
Development of testing protocols for solar thermal and solar PV devices for
ensuring uniformity in the test results from other authorised test agencies
Establishment of battery test facility for PV applications
Establishment of a 25 kWp test bed facility with mono-crystalline PV modules.
Establishment of a 21 kWp test bed facility for thin film PV modules
Establishment of performance monitoring and computer simulation facilities for
solar passive buildings.

Integration of existing 50kW solar thermal power plant with a biomass gasifier
system
Commissioning of a weather station for solar radiation resource monitoring at
SEC, Gwalpahari
Preparation of a number of technical reports and papers on important solar energy
topics, such as solar thermal power generation, solar refrigeration, solar
desalination, and other technologies
Expertise and Services
Solar thermal testing, standardisation and system design
Solar passive architecture
SPV testing, standardisation and system design
Material testing
Solar thermal power generation
Interactive research and development
Consultancy
International cooperation
Opportunities for Collaboration: Current R&D Activities
SEC invites individual professionals working in solar energy or institutions interested in
similar activities to building up a mutually beneficial relationship through joint projects.
The centre has been working jointly on a number of projects with national institutions
such as the IITs, NPL, Indian Agricultural Research Institute, Tata Energy Research

Institute, etc. It is also collaborating with reputed international institutions such as the
National Renewable Energy Laboratory (NREL) of USA; Inter-solar Centre of Moscow,
GENEC of France.
Consultancy Services from SEC
In addition to the existing user-oriented services of type testing, certification etc., the
Centre offers a comprehensive set of services to provide full technical assistance to users,
right from the state of initial conceptualisation. This includes the following:
Technology assessment report, both at national as well as at international levels
Identification of application-based renewable energy potential
Preparation of Feasibility Reports
Integration of solar and conventional systems
Financial and cost benefit analysis
Assessment of improvement in environment
Operation, performance monitoring and maintenance protocols
Diagnostic studies for performance improvement of existing systems
Designing of energy efficient buildings using solar passive concepts
International Cooperation
The Centre is designated as the Secretariat for G-15 project on solar energy applications.
A Pilot Project on Solar Energy Lighting has been implemented in Senegal by India by
providing technology and financial support under this project. India is also participating

in sub-project on solar water heating, coordinated by Egypt, by exchanging solar
collector and test data.
The Centre has an MoU with National Renewable Energy Laboratory (NREL), USA for
cooperation in the area of solar energy. As part of this MoU, a technology validation
project is currently under implementation where a test bed facility for thin film PV
modules manufactured in USA has been installed at the Centre to evaluate its
performance under Indian conditions.
The Centre and GENEC, France has identified hybrid PV Power Plants and battery for
PV applications as areas for cooperation.
The Centre for Wind Energy Technology
The Centre for Wind Energy Technology (C-WET) has been established as an
autonomous registered society in Chennai to undertake:
o R&D
o Wind resource assessment, standards and certification
o Wind turbine testing, information, training, monitoring
o Commercial services
National Institute of Renewable Energy
The Sardar Swaran Singh National Institute of Renewable Energy (NIRE) is
being set up 12 km off Jallandhar in Punjab at an estimated investment of Rs 377
million. When commissioned, the Institute would focus on new areas which are

not being taken up by the existing centres such as in biomass energy, energy
recovery from wastes, new technologies, energy needs in rural areas and hybrid
and integrated systems. The Institute will focus on commercialization, human
resources development, training and international cooperation, besides
supplementing the activities of existing centres and providing coordination as an
apex institute in the area of RE.
Indian Renewable Energy Development Agency Limited
The Indian Renewable Energy Development Agency Limited (IREDA) is a
financial institution set up by MNES in order to provide concessional financial
support to energy efficiency/conservation and RE sectors. The Secretary, MNES,
is the Chairman of IREDA.
Objectives
o To operate a revolving fund for the promotion and development of new
and renewable sources of energy
o To assist in the upgradation of technologies in the country through new
and renewable sources of energy (NRSE)
o To assist in rapid commercialisation of NRSE technologies, systems and
devices
o To extend financial support to energy efficiency and conservation projects
and schemes
Sectors

o Hydro Energy
o Wind Power
o Bio Energy
o Solar energy
o Development Activities/New Initiatives
o New & Emerging Technologies
o Energy Efficiency & Conservation
o Biofuel/Alternate fuel
New initiative
o IREDA has introduced two new windows of financing for wind energy
projects with reduced interest rates for 7 and 8 years repayment period.
o It has announced an incentive scheme to referring parties for the
generation of energy efficiency/conservation projects proposals.
o IREDA has been co-opted by IDBI for the operation of the Technology
upgradation fund scheme for installation of captive wind energy plants by
non-SSI textiles units to enable them to receive 5% interest incentive from
the Ministry of Textiles.
Special Programmes
o Special concessions for northeastern states and Sikkim, Jharkhand,
Chattisgarh, Uttaranchal, J&K, islands and estuaries

o Special concession to SC/ST, women entrepreneurs, ex-servicemen and
handicapped entrepreneurs
Financing Norms)
Instrument Level
Debt Instruments Project /Equipment Financing Schemes
Manufacturing Loans
Quantum of Assistance Up to 75% of project cost or up to 80% of equipment cost
Rate of Interest 5% to 12.50%
Moratorium Up to 3 years
Repayment Period Up to 12 years
Sector-wise Loan Sanction and Disbursement of IREDA since inception (As on
December 31, 2004)
Sectors Cumulative Sanctions Cumulative Disbursements

Hydro Energy 1621.69 644.26
Wind Energy 2152.01 1343.27
Cogeneration 1134.99 664.71
Biomass Power 617.34 425.2
Biomass Gasification 10.75 3.87
Biomass Briquetting 19.48 9.99
Biomethanation 72.47 57.6
Waste to Energy 49.14 38.1
Energy Efficiency and Conservation 271.97 86.41
Solar Photovoltaics 585.95 283.32
Solar Thermal 105.96 59.73
Miscellaneous 25.66 3.24
Total 6667.4 3,619.7
Tenth Plan Targets (2002-07)
o Additional capacity generation of 1,500 MW
o Energy savings to the tune of 1,20,000 MTCR/year
o Loan Sanctions - Rs. 5,270 crores

o Disbursements - Rs. 3,070 crores
New Initiatives
o Financing of Electrification of remote villages
Ministry of Power
Rural Electrification Corporation Limited
Rural Electrification Corp Ltd (REC) under the Ministry of Power, finances rural
electrification schemes in the country, and promotes and finances rural electricity
cooperatives; administers funds and grants from the Government of India and
other sources for financing rural electrification; provides consultancy services and
project implementation in related fields including RE; finances and executes
small, mini and micro generation projects; and develops other energy sources.
REC promotes, develops and finances viable decentralised power system
organisations in cooperative, joint, private sector, panchayat and other local
bodies.
REC has a mandate for financing generation projects of capacity up to 25 MW.
There is a vast scope for financing small generation projects for exploiting the
available NRSE.
ANNEXURE- II

Policies, Procedures and Incentives
Part a Policies
Part b Procedures
Part c Approvals and Clearances
Part d Fiscal Incentives
Part e Financial Incentives
Part a: Policies
The Prime Minister of India has announced a goal of 10% share for RE or 10,000 MW in
the power generation capacity to be added during the period up to 2012.
Renewable Energy Policy
A comprehensive RE Policy for all-round development of the sector, encompassing all
the key aspects, has been formulated by MNES. The broad objectives envisaged in the
policy are:
Meeting the minimum energy needs through RE
Providing decentralised energy supply in agriculture, industry, commercial and
household sectors in rural and urban areas
The policy envisages 10% of additional grid power generation capacity to be from RE by
2012. The policy is awaiting approval by the Government.
Policy for All-round Development of Renewable Energy

Policy measures aim at overall development and promotion of RETs and applications.
Policy initiatives encourage private as well as FDI including provision of fiscal and
financial incentives for a wide range of RE programmes. Further, the procedures have
been simplified, and provide excellent opportunities for increased investment in
technology upgradation, induction of new technologies, market-development and export
promotion.
Foreign Investment Policy
Foreign investors can enter into a joint venture with an Indian partner for financial
and/or technical collaboration and for setting up of RE-based power generation
projects
Proposals for up to 100 per cent foreign equity participation in a joint venture
qualifies for automatic approval
Hundred per cent foreign investment as equity is permissible with the approval of
the Foreign Investment Promotion Board (FIPB)
Foreign investors can also set up a liaison office in India
The Government of India also encourages foreign investors to set up RE-based
power generation projects on BOO basis. Various Chambers of Commerce and
industry associations in India provide guidance to the investors in finding
appropriate partners
Industrial Policy

MNES is promoting medium, small, mini and micro enterprises for manufacturing
and servicing of various types of RE systems and devices
Industrial clearances are not required for setting-up of an RE industry
No clearance is required from Central Electricity Authority (CEA) for power
generation projects up to Rs 1,000 million
A five-year tax holiday is allowed for RE power generation projects
Soft loans are available through IREDA for RE equipment manufacturing
Facilities for promotion of Export Oriented Units (EOUs) are available for the RE
industry
Financial support is available to RE industries for R&D projects in association
with technical institutions
Import of power projects are allowed
Private sector companies can set up enterprises to operate as licensee or
generating companies
Customs duty concession is available for RE spares and equipment, including
those for machinery required for renovation and modernisation of power plants.
Excise duty on a number of capital goods and instruments in the RE sector has
been reduced or exempted
Policies by State Governments
A number of states have announced policy packages including wheeling, banking,
third party sale and buy-back, which have been outlined in the respective
technology or programme areas in this publication

Some states are providing concessions or exemption in state sales tax and octroi.
These rates vary widely from state to state for different technologies and devices
and in periodicity
Fourteen states have so far announced policies for purchase, wheeling and
banking of electrical energy generated from various RE sources
Policies for Small-scale Industries
An industrial undertaking is defined as a small-scale unit if the investment in
fixed assets in plant and machinery does not exceed Rs 10 million
Small-scale industries (SSIs) are not permitted more than 24 per cent equity in its
paid up capital from any industrial undertaking, foreign or domestic
SSIs can get registered with the Directorate of Industries or District Industries
Centre in the state government concerned
SSIs are free to manufacture any item including those notified as exclusively
reserved for the small-scale sector
SSIs are free from locational restrictions, which are mandatory for large industries
Incentives for Investing in RETs
MNES provides financial incentives, such as interest and capital subsidy
Soft loans are provided through:
o IREDA, a public sector company of the Ministry
o Nationalised banks and other financial institutions for identified
technologies/systems

The government also provides various types of fiscal incentives for the RE sector,
which include:
o Direct taxes - 100 per cent depreciation in the first year of the installation
of the project
o Exemption/reduction in excise duty
o Exemption from Central Sales Tax, and customs duty concessions on the
import of material, components and equipment used in RE projects
The National Small Industries Corporation
RETs provide one of the best options for first-generation entrepreneurs and small-scale
industries (SSIs) and enterprises. MNES and IREDA have drawn up financial and fiscal
incentives to suit technology of varying sizes and scales for small- and medium-sized
investors and entrepreneurs
The National Small Industries Corporation (NSIC), under the Ministry of Industry
and Commerce, also provides assistance through a number of schemes, which
include financial and marketing services, technical services and training, and
RETs and Abatement of Greenhouse Gas Emissions
With increased international concerns to reduce greenhouse gas (GHG) emissions,
developed countries seek to meet their commitments under the Kyoto Protocol by
switching to RE and investing in this area in developing countries. In the context of
environmental sustainability, RETs are considered a highly attractive option since they

are clean and renewable.
The energy sector in India is the largest emitter of GHG emissions in India. Coal is the
countrys largest source of commercial energy. Thermal power plants, steel and cement
industries and railways are the major industrial consumers of coal. The CO2 emission
from coal consumption depend on the quality of coal used. Of the overall CO2 emissions
from fossil fuels, emissions from coal consumption account for almost 65%.
MNES has drafted a Renewable Energy Policy, which seeks to ensure that Renewable
Energy Technologies account for 10% of total power generation capacity in India by
2012.
Part b: Procedures
Highlights
Investment opportunities are available in all the RE areas that have been discussed
in the previous pages of this report, as well as other RE-based systems and
devices for decentralised applications
Indian and foreign investors can set up facilities for manufacture of RE systems
and devices based on any of the areas mentioned for their utilisation in India and
also for exports to other countries
Users of various RE systems and equipment, whether individual or corporate
houses, can invest in decentralised electrical and thermal plants and systems, and
install RE power projects for captive use

Facilitating Investment in Renewable Energy Technologies
The Government of India encourages foreign investors to set up power projects on
Build, Own and Operate (BOO) basis. Investors are required to enter into a power
purchase agreement with the concerned state government
No prior approval of the government is required to set up an industrial
undertaking with Foreign Direct Investment (FDI) by Non-Resident Indians
(NRIs) or Overseas Corporate Bodies (OCBs)
The Reserve Bank of India (RBI) has permitted Indian companies to accept
investment under the automatic route without obtaining prior approval from
RBI. Investors are required to notify the regional office of RBI, of receipt of
inward remittances within 30 days of such receipt and file required documentation
within 30 days of issue of shares to foreign investors
Foreign Investment Promotion Board (FIPB)
The FIPB has been revamped and made the nodal single window agency for all
matters relating to FDI as well as for promoting investment into India
The Board is chaired by the Secretary (Department of Industrial Policy &
Promotion), Government of India
It provides appropriate institutional arrangements, transparent procedures and
guidelines for investment promotion and to evaluate proposals for foreign
investment (other than those eligible for automatic approval by the Reserve Bank
of India)

FIPB would also monitor implementation of mega projects to facilitate further
investment and remove bottlenecks
The Board considers all investment proposals with or without technical
collaboration and/or industrial license
This Board meets every week and considers all applications within 15 days of
their receipt with the endeavour to communicate decisions to the applicants within
four weeks
Foreign Investment Implementation Authority (FIIA)
The FIIA has been set up in the Ministry of Commerce and Industry to translate
FDI approvals and implementations
It is headed by the Secretary (Department of Industrial Policy & Promotion) and
is serviced by the SIA
FIIA would provide a one-stop after-care service to foreign investors by helping
them to expedite approvals and clearances and to sort out operational problems
with other government agencies
The FIIA will act as a single-point interface between the investors and
government agencies including administrative ministries, state governments,
Pollution Control Boards, Directorate General of Foreign Trade, regulatory
authorities, tax authorities and Company Law Board among others
Approval holders have been requested to get in touch with respective officers in
FIIA
Simplified Mechanisms

Under the existing Industrial Policy, a short list of only six industries is kept under
licensing
All applications for which approval is required from the government are to be
filed with SIA and considered by subject specific committees or boards, and
decisions are taken within the specified time
These Committees include the:
o Project Approval Board (PAB) for foreign technology agreement cases
o Board of Approval (BOA) for 100 per cent EOUs
o Licensing Committee (LC) for industrial license
o Inter-ministerial Committee for Electric Hardware Technology Park
Sectors (EHTPs) and Electronic Software Technology Parks (ESTPs)
o Empowered Committee for granting concessions under the Income Tax
Act for Industrial Model Towns, Industrial Parks, etc
Secretariat of Industrial Assistance (SIA)
The SIA has been set up as an investor-friendly agency to provide a single
window for entrepreneurial assistance, investor facilitation, and for receiving and
processing applications, which require government approval
They are also expected to convey the governments decisions on applications filed
and for assisting entrepreneurs to set up projects and monitoring implementation
SIAs promotional activities include dissemination of information and data on a
monthly basis through the SIA newsletter and "SIA Statistics"

It also assists potential investors in finding joint venture partners and provides
information on relevant policies and procedures
Joint Ventures
Joint ventures are the commonly used mode by foreign investors as it provides
maximum visibility and presence in the country
A joint venture is generally a financial as well as technical collaboration. Various
Chambers of Commerce or the public accountants in India could guide the
investor in finding an appropriate partner
A foreign investor can enter into a joint venture not only for manufacturing RE
products and systems, but also in setting up RE-based power generation projects
A foreign investor can enter into a joint venture with an Indian partner who
understands the local environment and can exploit the business opportunities. A
feasibility study of the project should be done before entering into such a venture
Joint ventures could be in the following forms:
o Takeovers or strategic alliances with existing Indian companies: usually
joint ventures are in the form of takeovers or strategic alliances with the
existing reputed companies with a niche market
o A Greenfield project is the one which is set up with new manufacturing
facilities and new plant and machinery. For this purpose, an Indian joint
venture company could be formed with up to 100 per cent equity being
held by the foreign investor

o Whether it is a Greenfield project, takeover or a strategic alliance, an
Indian company is required to be formed for this purpose
A foreign investor can set up a liaison office as an intermediate step before
entering into a joint venture
Part c: Approvals and Clearances
CEA Clearances
CEA has prepared guidelines to help private sector generating companies to formulate
detailed project reports for obtaining techno-economic clearance and concurrence of
CEA.
Clearances Required for Power Projects and Agencies Concerned
Item Agency Remarks

STATUTORY CLEARANCE
Clearances under Electricity Act
Cost Estimates
Any Power project involving capital expenditure exceeding Required under Section 29 of
Central Electricity Authority
1 the limit set by the government needs to be scrutinised by Electricity (Supply) Act, 1948 {E
(CEA)
CEA for examination of salient features and benefits which (S) Act 1948)}.
may accrue therefrom
Techno-economic Clearance/Concurrence of CEA
By CEA after examination of:
River works/dams to be put up for hydro and for
water availability for thermal plants
Greatest possible economic output of electric Under section 30 of Electricity
power (Supply) Act, 1948 SEBs, state
2 Transmission lines and systems Central Electricity Authoritygovernments concerned, Ministries
(CEA) of Coal Petroleum & Natural Gas,
Reasonableness of the scheme Railways & Surface Transport
involved
Site location for optimum utilisation of fuel
resources, distance from load centres
transportation facilities, water availability and
environmental considerations
1 State Governament
3 SEB Clearance Sec 44E (S) Act 1948
2 State Electricity Government
4 Publication State governments Section 29 clause (2), (3), (4) and
Schemes to be published in the Official Gazette or local (6) Electricity (Supply) Act, 1948.
newspapers as the generating company may consider State Governments
necessary along with a notice for at least two months and

modification, if any consequent to public representation

Environment and Water-related Clearances
Water (Prevent
ion & Control of
Pollution) Act,
State or Central Pollution Control1974 & Air
5 Pollution Clearance: Water and Air (Prevention &
Board
Control of
Pollution) Act,
1981
Coordination with State
1 State Government
Forest Department and
6 Forest Clearance 2 Ministry of Environment &
MoEF regarding Forest
Forests (MoEF)
(Conservation) Act, 1980
1 State Government
7 Environment & Forest Clearance As per item 6 &7 and Governments Policy in force
2 MoEF
Interaction between state government departments &
1 State Government
8 Water Availability CWC required. Relevant Irrigation Act of the state and
2 Central Water Commission (CWC)
CWC
9 Hydro Project (Mini-Micro) Ministry of Water Resources Under Relevant Acts
Civil Aviation Clearance for
10 National Airport Authority
Chimney Height
Clearances under Companies and
Trade Acts
11 Registration of Company Registrar of Companies Under Indian Companies Act, 1956
12 Rehabilitation of Company Registrar of Companies Under Indian Companies Act, 1956
Directorate General of Trade
13 Equipment Procurement Development, Chief Controller of Import & Export Acts
Imports & Exports
NON-STATUTORY CLEARANCES
14 Land Availability State government
Dept of Coal, Ministry of Petroleum
15 Fuel Linkage
& Natural Gas
CEA, Department of Power;
16 Financing Department of Economic Affairs;
Financial Institutions
Department of Coal, Ministry of Petroleum & Natural
17 Transportation of Fuel
Gas, Ministry of Railways, Shipping & Surface Transport
Environmental Clearances
Entrepreneurs are required to obtain statutory clearances from MOEF, Government of
India, relating to Pollution Control and Environment, for setting up an industrial project.
Part d: Fiscal Incentives
The fiscal incentives include direct taxes - 100% depreciation in the first year of the
installation of the project, exemption or reduction in excise duty, exemption from central

sales tax, and customs duty concessions on the import of material, components and
equipment used in RE projects.
MNES has issued guidelines to all state governments for creation of an attractive
environment for evacuation and purchase, wheeling and banking of electrical power from
RE sources.
Incentives for 2003-2004
The fiscal incentives applicable for 2003-2004 are stated under the following subheads:
I. Indirect Taxes
i. Customs Duty
Customs duty for wind energy equipment and components
Customs duty for SPV equipment and materials
Customs duty for solar thermal equipment and systems
Customs duty for power generation plants and machinery
ii. Excise Duty
Specified list of RE devices and systems for excise duty concession.
II. Direct Taxes
Specified list for rates of depreciation under Income Tax rules.
Non-conventional energy power policies in states as on October 2002

Buy-
Wheeling Banking back Annual
Sl No State Programme TP Sale
2% 12 months Rs 2.25 Escalation 5%
per kWh
9 Maharashtra Wind b b b b 1994-95
Wind b b b 1994-95
Cogen @2% from the year of
b Cogen 7% x ba bb 1994-95
Rs. 3.05/kWh commissioning
2% for old SHP b b b b 1999-2000
WTE 2% 2.6% b b b
projects 1994-95
x
28.4%+Rs0.5/
1 Andhra Pradesh 10 Orissa SHP 2-3% b b At mutually
unit for new x
b not < agreed rate
projects
11 Punjabb Cogen bHTT b x Rs. 3.01 @ 3% 2001-02
b SHP bb not < b b Rs. 2.73 1998-99
SHP 2%,
WTE8-12M bHTT ba bb 1997-98
Rs. 3.01 3% from 2000-01
WTE 2%, 8-12M a b 1997-98
12 Rajasthan SHP b b b Rs. 2.75 1998-99
Wind a Wind a b a b b b x Rs. 2.89 1999-2000
2 Chattisgarh Biomass a Cogena b a bb b x b 1994-95
WTE a WTE a b a b b b x Rs. 3.03 2000-01
Wind
13 4%
Tamil Nadu 6
Windmonths 5% x Rs.
5% 2.60 5 paise
x 2002-03
Rs. 2.70 No escalation
3 Gujarat Biomass 4% Cogenb 2-10%b b 2% b x 1994-95
Rs. 2.73 1995-96
WTE 4% SHPb 5% b xb x 1994-95
Mutually 2001-02
b with agreed rate
4 Himachal Pradesh SHP b x Rs. 2.50 x
addl.charge Rs. 2.70
Wind b WTE b x b b b x 1994-95 1995-96
Cogen
14 U.P.b Windb 12% b bb 0.5%1994-95 b 1995-96
5 Haryana
SHP b Cogenb 12.5%b b 24b x 1994-95 b 1999-2000
WTE b SHPb b b months b b 1994-95 b 1995-96
Wind 20% b 2% on ba 1994-95
WTE a
monthly b b b b 1995-96
Cogen
15 20%
W.B. Windbasis a x 1994-95 x
ab not < b 6M x
b On
Cogen -HTT - - - -
6 Karnataka monthly b
SHP b 6M x x x
16 Uttaranchal SHPbasis b b 2M b Mutually
-
a agreed rate
SHP 2-5% b 2% a 1994-95
SHP: Small Hydro a
WTE b Power, Wind:
b Wind Power, WTE: a Waste1994-95
to Energy, Cogen: Bagasse Cogeneration.
a: allowed; x: not allowed
Rs.
2.80 /
kWh 2000-01 for 5
Wind 5% June-Feb x years
Rs.
Cogen/Biomass b x x 2.50 / b
kWh
7 Kerala
Rs.
SHP 5% June-Feb x 2.80 / 2000-01 for 5
kWh years
WTE 5% June-Feb x 2000-01 for 5
Rs. years
2.80 /
kWh
Wind b x b b x
Cogen b x b b x
8 M.P.
SHP b x b b x
WTE b x b b x

INCENTIVES FOR NON-CONVENTIONAL ENERGY SECTOR: 2003-2004

Sl
Item 2003-04 duty rates
No
Spl.
Sl Item Basic Addl
2003-04
Addlduty rates
No CUSTOMS DUTY
(A) WIND ENERGY (Notification No. 21/2002 item No. 224, condition No. Basic
35) Spl.
Addl
modified by Notification No. 26/2003 dated 1.3.2003 Addl
Chapter5%No. 85 Item No.0%
85.024%
Wind operated electricity generators (B) SOLAR PHOTOVOLTAICS
1 up to 30 kW and Battery Chargers up (Notification No. 27/2002 item no. 86, condition 5)
8
to 30 kW The following goods namely: Nil
(A) Silicon
Parts of wind operated electricity in all forms, that is,
polycrystalline
generators for the manufacture of the silicon or ingots, for
the
maintenance of wind operated manufatcure of undiffused
electricity generators, namely:- silicon wafers
(B) Undiffused silicon wafers, for
(a) Special bearings
2
(b) Gearbox the manufacture of solar cells or
(c) Yaw components solar cell modules
(d) Wind turbine controllers and Chapter No. 85 item No. 8541.40
(e) Parts of goods specified at (a) to cells whether or not
9 Photovoltaic 15%
(d) above assembled in modules or made up
Blades for rotor of wind operated into panels 0% 4%
electricity generators, for the A Solar cells
3
manufacture or the maintenance B of PV modules
wind operated electricity generatorsNotification No. 27/2002 item no. 116, condition no. 5 & 13
Parts for the manufacture
11 Silverorpowder
the suspension of chapter 5%
0% 4%
maintenance of the blades for rotor 32 or 71
4
of wind operated13 electricity
Silicone resins and silicone rubbers 5%
generators 0% 4%
of chapter 38
Raw materials for manufacture of Notification no. 25/99 item nos. 7, 18 & 38
5 blades for rotor of wind operated
14 Raw materials for manufacture of 5%
electricity generators 16% 4%
solar cells and modules
8502.31 Wind operated electric
6 Notification
25%no. 26/2003 item no. 4%
Nil 423
generators
15 The following goods namely: 5%
8503.00 Parts of wind electric
7 (1) High purity graphite felt/graphite
25% Nil 4% 0% 4%
generators
pack for growing silicon ingots

Sl
No
Spl.
Basic Addl
Addl
(C) SOLAR THERMAL
(Notification No. 21/2002 item no. 223)
The following goods namely:
(A) Vacuum tube solar collectors
concentrating solar collectors plastic
collectors or sterling engine for
manufacture of solar energy
16 15% 0% 4%
equipment
(B) Linear actuator for tracking
system, Fresnel lens or sun sensor
for manufacture of concentrating
solar collectors
Notification No. 26/2003 item no. 421
Toughened glass with low iron
content and transmissivity of
17 5% 16% 4%
minimum 91% and above for use in
solar thermal collectors or heaters
Sl
No
Spl.
Basic Addl
Addl
(D) POWER GENERATION(Notification No. 21/2002 item no. 237, condition
no. 46)
All goods supplied by a
manufacturer-supplier for the
manufacture and supply of
18 5% 16% 4%
machinery and equipment to a power
generation plant (other than captive
power generation plant)
Captive Power Plants of 5 MW or
19 25% 16% 4%
more
Power generation projects
(excluding captive power plants set
20 5% 16% 4%
up by projects engaged in activities
other than in power generation)
21 Other industrial plants or projects 25% 16% 4%

Sl No Item 2003-04 Basic duty rates

EXCISE DUTY
Notification No. 6/2002 item no. 237, list 9
Specified Non-conventional Energy
1 Nil
Devices/systems
2 Silicon in all forms Nil
3 Biogas Nil
4 Biogas stoves, biogas lights Nil
Chapter No. 84 item no. 8410
Hydraulic turbines, water wheels and
5 16%
regulators therefor
Modified by Notification No. 6/2003 dated 1.3.2003

6 Battery powered road vehicles 8%
Chassis for use in the manufacturing of
7 16%
battery powered road vehicles
Notification No. 62/91
8 Improved chulhas Nil

List of Specified Non-conventional Energy Devices/Systems exempted from Excise
Duty
Flat plate solar collectors
Black continuously plated solar selective coating sheets (in cut lengths or in coils
and fins and tubes)
Concentrating and pipe type solar collectors
Solar cookers
Solar water heater and systems
Solar air heating systems
Solar low pressure steam systems
Solar stills and desalination systems
Solar pumps based on solar thermal and solar photovoltaic conversion
Solar power generating systems
Solar photovoltaic modules and panels for water pumping and other applications
Solar crop driers and systems
Wind operated electriity generators, their components and parts thereof
Water pumping windmills, wind aero-generators and battery chargers
Biogas plants and biogas engines
Agricultural, forestry, agro-industrial, industrial, municipal and urban waste
conversion devices producing energy
Equipment for utilizing ocean waves energy

Solar lantern
Ocean thermal energy conversion systems
Parts consumed within the factory of production of such parts for the
manufacture of goods specified at S. No. 1 to 19 above
Solar photovoltaic cells
Direct Taxes
Concession under Income Tax Rules
Under Income Tax Rules following concessions are available to the non-conventional
energy sector:
Section 32
1 Accelerated 80% depreciation on specified RE- based devices/projects (see table
Specified List...)
Section 80 IA
2 Industrial undertakings set up in any part of India for the generation or generation and
distribution of power at any time during the period beginning on the 1st day of April,
1993 and ending on the 31st day of March 2003. Hundred per cent deduction from profits
and gains for first five years and thereafter 30 per cent of the profits and gains. This
benefit can be availed for any 10 consecutive assessment years falling within a period of

15 assessment years beginning with the assessment year in which that industrial
undertaking begins generation or generation and distribution of power.
3 The budget for 2001-2002 has proposed a 10-year tax holiday for the core sectors of
infrastructure, including solid waste management systems. This may be availed during
the initial 20 years. Further, the Budget has also proposed a 10-year tax holiday for the
generation and distribution of power, to be availed during the initial 15 years.
Section 115 J
4 Exemption from MAT to industrial undertakings on profits derived from the business of
generation and distribution of electricity.
Section 80JJA
5. Hundred per cent deduction in respect of profit and gains from business of collecting
and processing bio-degradable wastes.
Section 10 (23G)
6 Income by way of dividends, interest or long-term capital gains of infrastructure capital
fund or infrastructure capital company from investments by way of shares or long-term
finance in any enterprise wholly engaged in the business of developing, maintaining and
operating any infrastructure facility and which has been approved by the Central
Government on an application made by it in accordance with the rules made in this behalf
and which satisfies the prescribed conditions.

For the purpose of this clause among other things, infrastructure facility means a project
for generation or generation and distribution of electricity or any other form of power
where such project starts generating power on or after April 1, 1993.
Specified List for Rates of Depreciation under Income Tax Rules
Depreciation
Block of Assets
Allowance
Cogeneration systems
a. Back pressure pass out, controlled extraction, extraction-cum-condensing turbines
80%
for cogeneration along with pressure boilers
b. Vapour absorption refrigeration systems
c. Organic rankine cycle power systems
d. Low inlet pressure small steam turbines
Renewable energy devices being
a. Flat plat solar collectors 80%
b. Concentrating and pipe type solar collectors
c. Solar cookers
d. Solar water heaters and systems
e. Air/gas/fluid heating systems
f. Solar crop driers and systems
g. Solar refrigeration, cold storages and air-conditioning systems
h. Solar steels and desalination systems
i. Solar power generating systems
j. Solar pumps based on solar thermal and solar photovoltaic conversion
k. Solar photovoltaic modules and panels for water pumping and other applications
l. Wind mills and any specially designed devices which run on wind mills
m. Any special devices including electric generators and pumps running on wind
energy
n. Biogas plant and biogas engines
o. Electrically-operated vehicles including battery-powered or fuel-cell powered
vehicles
p. Agricultural and municipal waste conversion devices producing energy
q. Equipment for utilising ocean wave and thermal energy
r. Machinery and plant used in the manufacture of any of the above sub-items
Part e: Financial Incentives
MNES provides financial incentives for various RE programmes. These include interest
and capital subsidies. In addition, soft loans are provided through IREDA, a public sector

company of the Ministry and also through some of the nationalised banks and other FIs
for identified technology systems.
Details for the sectors are given in the following order:
Wind Power
Small Hydro Power
Biomass Power - Bagasse-based Cogeneration and Gasifiers
Energy from Wastes
Solar Photovoltaics
Solar Thermal
Hybrid systems and Wind
Biogas
New Technologies
Battery-operated Vehicles (BOVs)
Energy Efficiency
Energy Efficiency Projects and Equipment
Miscellaneous
Miscellaneous Schemes
1.0 Power Generation Technologies
1.1 Wind Power
MNES Financial Incentives for Wind Power

Sl No Programme/Scheme Amount of Subsidy

60% of the cost of wind turbine equipment,
Financial Assistance for Wind Power
maintenance spares, and erection
1 Demonstration projects provided to SNAs/state
commissioning, subject to eligibility and
Governments/SEB
benchmark cost of Rs 3.50 crore/MW
IREDA Financial Assistance for Wind Power
Min.
Interest Repa
Moratorium Promoters
Category Rate % yment Lending Norms
(max) (yrs) Contribution
pa (max) (yrs)
%
Project Financing
Development of wind farms Up to 70% of total project
11.50 10 1 30
on lease basis cost
Development of wind farms Up to 70% of total project
11.00 10 1 30
on ownership basis cost
Development of wind farms
by machine
suppliers/manufacturers up Up to 70% of total project
11.50 10 1 30
to 10 MW/party/year on cost
built, operate, own, lease,
transfer basis
Development of wind
farms/estates with minimum
station capacity of 10 MW
by co-operative
sector/Public/Joint/Private
sector on built, operate, own, Up to 70% of total project
11.25 10 1 30
lease, transfer basis subject cost
to following conditions:
i. Applicant having minimum
net worth Rs. 100 crores
ii. Applicant having AAA or
equivalent rating.
Development of
demonstration of off-shore
wind farm capacity of 10
MW by co-operative
sector/Public/Joint/Private
sector on built, operate, own, Up to 70% of total project
11.00 10 2 30
lease, transfer basis subject cost
to following conditions:
i. Applicant having minimum
net worth Rs. 100 crores
ii. Applicant having AAA or
equivalent rating.
Equipment Financing

Up to 75% of the cost of

eligible equipment
(Eligible equipments
Wind Electric Generators up
12.00 10 1 25 comprise WEG, Tower,
to 1 MW capacity
control panel, transformer
and reactive power
compensator)
Incentives Declared by the State Governments for Wind Power
Andhra West Madhya Tamil

Items Karnataka Maharashtra* Rajasthan Gujarat Kerala
Pradesh Bengal Pradesh Nadu
2% of 20% of 2% of 2% of 2% of 5% of 4% of 5% of
Wheeling 2% of energy
energy energy energy energy energy energy energy energy
2% per 5%
12 6 9 months
Banking month for -- 12 months 12 months 12 6 months
months months (Jun-Feb)
12 months months
Rs
To be Rs Rs
Rs Rs 2.80/kWh
decided Rs 2.89/kWh Rs. 2.60/kWh
2.25/kWh 2.25/kWh Rs 2.25/kWh (5% esc.,
Buy-back on case 2.25/kWh (5% esc.), 2.70/kWh (5paise
(5% esc., (5% esc., (5% esc., 1994) 2000-01
to case (no esc.) (1999- (no esc.) esc., 2002-
1994) 1994) for 5
basis 2000) 03)
years)
Third Not Not Not Not Not
Allowed Allowed Allowed Allowed
Party Sale allowed Allowed allowed allowed allowed
Maximum
20% max Rs. 25 Same as
Capital 30% (max Rs
(Rs 25 lakhs for -- for other -- -- -- --
Subsidy 20 lakh)
lakh) backward industries
area
Exemption
on 30% of
No No the
Other Industry electricity electricity installed
-- -- -- -- --
Incentives Status duty for 5 duty for 5 capacity
years years on
electricity
duty
The Policy expired on March 31, 2002.
1.2 Small Hydro Power
MNES Financial Incentives for Small Hydro Power Programme

Above 15
500 kW
Below 500 Above 1 MW Above 5 MW & MW &
Schemes Areas up to 1
kW & up to 5 MW up to 15 MW up to 25
MW
MW
Up to Rs. 1.00
Plain Up to Rs. 0.75 lakh Up to Rs. 1.50 lakhs
Survey & lakh
Investigation Up to Rs. 2.00
Hilly Up to Rs. 1.00 lakh Up to Rs. 3.00 lakhs
lakhs
Up to Rs. 1.00
Plain Up to Rs. 0.75 lakh Up to Rs. 1.50 lakhs
Detailed Project lakh
Report Up to Rs. 1.00
Hilly Up to Rs. 0.75 lakh Up to Rs. 2.00 lakhs
lakh
Interest Subsidy Plain 5.00% 2.50% 2.00% 1.50%
for Commercial
Projects Hilly 7.50% 5.00% 3.00% 2.00%
90% cost
90% cost of of the 75% cost of the Equipment cost+
NE Region, the project up project up project up to 25% of civil cost
Nil
Sikkim to Rs. 75000/- to Rs. Rs. 45000/- up to Rs. 22.50
kW 60000/- kW crore/project
kW
Equipment
Capital Subsidy Middle Equipment cost+
Equipment cost+ 50% of cost+ 25% of
for Govt. sector Himalayas, 25% of civil cost
civil cost up to Rs. civil cost up to Nil
projects Ladakh, up to Rs. 15
45,000/kW Rs. 3.00
A&N crore/project
crore/MW
Equipment
Other Areas Equipment cost+
Equipment cost+ 50% of cost+ 25% of
(only 25% of civil cost
civil cost up to Rs. civil cost up to Nil
notified hilly up to Rs. 7.5
30,000/kW Rs. 1.5
regions) crore/project
crore/MW
Renovation & Modernisation Limited to Rs. 10
Up to Rs. 2.0 crores/MW Nil
of old projects crores/project
Development/Upgradation of
water mills
Mechanical Mode Rs. 30,000
Mechanical/Electrical Mode Rs. 60,000
IREDA Financial Assistance for Small Hydro Power

Interest Repayment Moratorium Min. Promoters

Category Lending Norms
Rate % pa (max) (yrs) (max) (yrs) Contribution %
Project Financing
Up to 75% of total
project cost
100% of eligible
equipment cost & 90%
Up to 1 MW of civil cost limited to a
11.75 12 3 25
capacity maximum of 75% of
total project cost in
case of project is
sanctioned from
International funds
Up to 70% of total
project cost
100% of eligible
Above 1 MW
of civil cost limited to a
and up to 5 MW 12.00 12 3 30
maximum of 70% of
capacity
case of project is
sanctioned from
International funds
Up to 70% of total
project cost
100% of eligible
Above 5 MW
and up to 15 12.25 12 3 30
maximum of 70% of
MW capacity
case of project is
sanctioned from
International funds
Up to 70% of total
project cost
100% of eligible
Above 15 MW
and up to 25 12.50 10 3 30
maximum of 70% of
MW capacity
case of project is
sanctioned from
International funds
1.3 Biomass Power
Central Financial Assistance (CFA) in the form of interest subsidy will be provided
for bagasse cogeneration project on the following pattern

Pressure Interest
Bagasse Co-generation
Configuration Subsidy
40 bar & above 3%
Projects by Cooperative / Public / Joint Sector Sugar 60 bar & above 4%
Mills 80 bar & above 5%
100 bar & above 6%
60 bar & above 2%
Projects in IPP mode in Cooperative / Public / Joint
80 bar & above 3%
Sector Sugar Mills
100 bar & above 4%
60 bar & above 1%
Projects by Private Sector Sugar Mills 80 bar & above 2%
100 bar & above 3%
For projects by cooperative / public sector / joint sector sugar mills in the first category,
the floor rate of interest shall not be lower than 6%. For projects under the other two
categories, a floor rate interest of 8% shall apply. The maximum amount of capitalized
interest subsidy to a bagasse cogeneration project shall be limited to Rs. 400 crore.
Central Financial Assistance (CFA) in the form of interest subsidy will be provided
for Biomass power projects on the following pattern
Pressure Interest
Biomass Power
Configuration Subsidy
Direct combustion, cogeneration, including captive power 60 bar & above 2%
projects 80 bar & above 3%
Atmospheric gasification, includingcaptive power projects - 3%
Projects with MW scale 100% Producer Gas Engines Capital subsidy of Rs. 1.00 crore / MW
Advanced biomass gasification projects Capital subsidy of Rs. 1.00 crore / MW An
additional interest subsidy @ 2% will be provided with floor rate of interest not lower
than 6% for Biomass Power / Cogeneration Projects in all Special Category States, and
Islands. The floor rate of interest for other categories of projects shall not be lower than
8%. The maximum amount of capitalized interest subsidy for any biomass power project
shall be limited to Rs. 2.00 crore. A total capacity not exceeding 100 MW shall be
supported in any State during the 10th Plan. The capital subsidy to projects based on MW

scale 100% producer gas engines shall not exceed Rs. 2.00 crore per project, and to
advanced biomass gasification projects shall not exceed Rs. 8.00 crore per project.
FINANCIAL ASSISTANCE FOR BIOMASS POWER/COGENERATION
(a) Interest Subsidy for Biomass Power Projects (Commercial Projects) (subject to
net rate of Interest, after the interest subsidy, not being less than 11%)
Category Reduction of Interest Rate on Term Loan

a) Forestry based & Agro-based Industrial
2%
residues
b) Energy Plantation; Forestry & Agro Residues 3%
(b) Interest Subsidy for Bagasse/Biomass Cogeneration Projects (Commercial
Projects) (subject to net rate of interest, after the interest subsidy, not being less
than 11%)
Configuration Reduction of Interest Rate on Term Loan

40 bar and above 1%
60 bar and above 2%
80 bar and above 3%
Additional 2% interest subsidy is provided for projects in public sector/cooperative sugar
mill.
(c) OTHER INCENTIVES FOR BIOMASS POWER/CO-GENERATION
PROJECTS
To BIOMASS POWER/CO-GENERATION PROJECTS

SNAs Rs. 0.50 lakh/project; Max. 5.00 lakhs/project
DPR Rs. 1.00 lakh/MW; Max. 5.00 lakhs/project

(d) Financial Assistance for the district level Biomass Assessment Studies under the
Programme
Financial Assistance up to Rs. 1.00 lakh per district, will be provided
IREDA Financial Schemes for Co-generation (Grid-interfaced)
Biomass Co-generation (Including Sugar Industry)
Promoter's
Interest Rate (% Repayment Moratorium Lending
Category Contribution
pa) (yrs) (max) (yrs) Norms
(%)
Project Financing
(a) Small scale cogeneration (except sugar industry) up to 7.5 MW installed capacity with
1. 63 kg/m2 Up to 70% of total
12.50 10 3 30
Pressure project cost
12.25 10 3 30
pressure project cost
11.75 10 3 30
(b) Above 7.5 MW installed capacity with
12.00 10 3 30
11.75 10 3 30
11.50 10 3 30
IREDA Financial Assistance for Biomass Power (Direct Combustion Mode)
Promoter's
Interest Rate (% Repayment Moratorium Lending
Category Contribution
pa) (yrs) (max) (yrs) Norms
(%)
Project Financing
(1 MW to 7.5 MW)
12.00 10 3 30
11.75 10 3 30
11.25 10 3 30
1.4 Energy from Wastes

MNES Financial Incentives for Energy from Urban, Municipal and Industrial
Wastes
Sl
Programme/Scheme Amount of Subsidy
No
For reducing rate of interest to 6.0%
(4% in case of projects taken up by
Municipal Corporation/Urban Local
Bodies) subject to a maximum of Rs 2
1 Interest Subsidy
crore/MW for waste-to-power
project, Rs 1 crore/MW for fuel-to-
power project and Rs 0.50 crore/MW
for waste-to-fuel project
Financial support for the preparation of
50% of the cost, subject to a maximum
2 DPR/Techno-economic Feasibility Report
of Rs 2 lakh
(TEFR)
Incentive to Municipal Corporation/ Rs 15 lakh per MW
3 Urban Local Bodies for site Rs. 7.5 lakh per MW if the project is
clearance/facilitation/coordinated actions for waste to fuel or fuel to power
Rs 5 lakh per MW
Incentive to SNAs for their coordinated
4 Rs. 2.5 lakh per MW if the project is
actions/monitoring, etc
for waste to fuel or fuel to power
Financial Support for Demonstration
5 Under review
Projects
IREDA Financial Assistance for Waste to Energy
Interest
Repayment Moratorium Promoter's Lending
Category Rate (%
(yrs) (max) (yrs) Contribution (%) Norms
pa)
Project Financing
Up to 70% of
Recovery of energy
12.25 10 3 30 total project
from Industrial Waste
cost
Recovery of energy
from Urban and
Up to 70% of
Municipal Waste 11.00 10 3 30
total project
(i) up to 3 MW 11.50 10 3 30
cost
(ii) above 3 MW & up
to 6 MW
IREDA Financial Assistance for Grid Inter-connection facility for eligible utilities
for Renewable Energy Power Evacuation

Interest Promoter's
Repayment Moratorium Lending
Category Rate (% Contribution
(yrs) (max) (yrs) Norms
pa) (%)
Grid Inter- 100% of
connection eligible
facility for equipment cost
eligible utilities 12.50 10 1 30 limited to a
for Renewable maximum of
Energy Power 70% of total
Evacuation project cost
IREDA Financial Assistance for Transmission/Distribution facility for eligible
utilities for Renewable Energy Power Evacuation
Interest Promoter's
Category Rate Contribution
(% pa) (%)
100% of
eligible
equipment
cost
Transmission/Distribution
limited to
facility for eligible
12.50 10 1 30 a
utilities for Renewable
maximum
Energy Power Evacuation
of 70% of
total
project
cost
IREDA Financial Assistance for Alternate Fuel
Interest Promoter's
pa) (%)
Biofuel (Ethanol
Up to 70%
production through
of total
Biomass/Sugar 11.00 8 2 30
project
juice/Molasses and
cost
Biodiesel production)
IREDA Financial Assistance for Fuel Cells

Interest Promoter's
pa) (%)
Up to 70% of
Fuel Cells 11.00 8 2 30 total project
cost
HUDCO Financing for Waste Management Projects
Financing Pattern (Other than EWS and Action Plan Scheme)
Interest
Repayment
Sl Extent of Rate (Excl.)
Category
No Finance (%) Interest Tax Period
(%) (Yrs )
Housing (Other than EWS, LIG &
APS)
utility and social infrastructure, 13.50 10
1 80
waste management, land acquisition, 13.75 15
Line of Credit, commercial, building
material
IREDA Financial Assistance for Solar Photovoltaic Systems
Interest Promoter's
pa) (%)
Manufacturing Equipment
Up to 80% of
Solar PV modules &
systems
cost
Production of SPV Up to 80% of
Cells & silicon 12.50 6 1 20 total project
ingots/wafers for SPV cost
Funding SPV under Market Development Programme
Systems of all
categories except Up to 80% of
pumping 12.50 6 1 20 total project
All cost
applications
RAGHURAM.C.SORAGAVI (MBA IN POWER MANAGEMENT)
Up to 80% of 122
SystemsWind-SPV
Hybrid System
cost
2.0 Solar Energy Technologies
2.1 Solar Photovoltaic Power
MNES Financial Incentives for Solar PV Grid-connected Power Projects
Sl
No
- 2/3rd of the project cost
subject to a maximum of Rs
Solar Photovoltaic Grid-connected Power Projects:
1.2 crore per 100 kW
Solar Photovoltaic Grid-connected Power Projects for niche
- Up to Rs 1 lakh for
applications, namely, voltage support systems at the tail-end of the grid
1 preparation of DPR
in rural areas and rooftop peak-shaving systems in Urban Centres.
- 2.5 % of MNES share
Projects to be implemented by SEBs, SNAs and Private Electric
subject to maximum of Rs 5
Utilities only.
lakh for O&M, data
compilation, etc
MNES Financial Incentives for Solar Photovoltaic Systems (2 years AMC)
Financial Assistance (central subsidy) is available for purchase of various solar PV
systems to certain eligible categories of users. Under the PV water pumping programme a
combination of soft loan and central subsidy can be availed.

(A) For General Areas (excluding all special category States and Islands)
Sl
SPV System Central Subsidy
No
Solar Home System 50% of ex-works cost, subject to a maximum of
Model 1 (18 W module, 1
light) Rs. 2,400/-
lights) Rs. 4,550/-
1 Model 3 (37 W module, 1
light, 1 fan) Rs. 4,550/-
lights, 1 fan) Rs. 8,440/-
lights) Rs. 8,440/-
2 Street Lighting System Rs 9,100/-
Power Plants and other
3 Rs. 1,19,000/kWp of PV array capacity
Community Systems
(i) Rs. 100 / W of PV array used, subject to a maximum of Rs. 2
lakh/system when no soft loan is availed
4 PV Water pumping system
(ii) Rs. 75 / W of the PVarray subject to a maximum of Rs. 2
lakh/system
(B) For special category States and Islands
Sl
SPV System Central Subsidy
No
Solar Home System 90% of ex-works cost, subject to a maximum of
light) Rs. 4,300/-
lights) Rs. 8,200/-
1 Model 3 (37 W module, 1
light, 1 fan) Rs. 8,200/-
lights, 1 fan) Rs. 15,190/-
lights) Rs. 15,190/-
2 Street Lighting System Rs 16,390/-
Power Plants and other
3 Rs. 2,14,200/kWp of PV array capacity
Community Systems
Rs. 135/W of the PV array of the system (subject to a maximum of
4 PV Water pumping system
90% of approved ex-works cost)
Eligible categories of Beneficiaries for Central Subsidy
SPV System Eligible Category of Beneficiaries

All categories of individual beneficiaries and non profit
Solar Home
institutions/organisations
Systems
No individual would be given more than one solar lantern
All categories of non-commercial institutions/organisations, State
Street Lighting
Nodal Agencies, Electricity Boards, Panchayats, Zilla Parishads
Systems
and DRDA's
SPV Power All categories of non-commercial institutions/organisations, State
Plants/ Other Nodal Agencies, Electricity Boards, Panchayats, Zilla Parishads
RAGHURAM.C.SORAGAVI
Systems (MBA IN POWER MANAGEMENT)
and DRDA's 124
PV water pumping
All categories of users
systems Systems
SCHEME FOR INTEREST SUBSIDY FOR USERS OF PV SYSTEMS
The interest subsidy scheme is aimed at expanding the commercial market for SPV
products in the country, so that the capital subsidies can be gradually phased out. The
scheme will offer soft loans for the purchase of Solar Photovoltaic (SPV) systems and
power plants. The scheme will be implemented through IREDA and banks for which
MoUs will be signed between MNES and IREDA and banks. Only those SPV systems
and power plants, which conform to the MNES specifications will be eligible for supply
and other benefits under this scheme.
The main features of the scheme are shown in the table below:

S.
Feature Implementation through IREDA Implementation through Banks
No.
Individuals and organizations
Eligible All categories of users including
which do not claim any
1. categories of intermediaries and commercial
depreciation benefit on the
beneficiaries organizations
investment
7% (commercial borrowers who can
claim depreciation benefits) 5%
(individuals and other organizations)
Financial intermediaries who borrow
funds from IREDA for on-lending at
Rate of 5% or 7% rate of interest will be
2. 5%
Interest charged an interest rate of 2.5% or
4.5% respectively by IREDA. Such
intermediaries will not be able to claim
depreciation benefit and the on-lending
arrangement will not be treated as a
lease arrangement.
3. Loan Period 5 years 5 years
4. Moratorium 1 year No Moratorium
Amount of
5. 80% of the cost of the project 85% of the cost of the systems
loan
Upper limits
6. No Limit Rs. 5 lakhs
for a loan
Service
7. 1% of the loan disbursed Rs. 300 per loan disbursed
Charge
All types of SPV systems except
solar pumps are covered under this
scheme. Loans will not be
provided at subsidized rates for
All types of SPV systems except solar
systems that are available with
pumps are covered under this scheme.
capital subsidy, with the exception
Loans will not be provided at
of solar generators for which both
Systems subsidized rates for systems that are
8. subsidies and soft loans will be
covered available with capital subsidy, with the
available during 2002-03.
exception of solar generators for which
For solar home systems installed
both subsidies and soft loans will be
as part of the MNES programme
available during 2002-03
for electrification of remote
villages, banks may provide soft
loans for the unsubsidized
portionof the cost of the systems.
The amount of loan will be up to 85% of the cost of solar lantern. The
Loans for interest rate for individual users will be 5% p.a. in general areas and 3% in
9. Solar the North-Eastern Region. Banks will be available for a service charge of
Lanterns Rs. 100 per loan for solar lanterns. The service charge for IREDA will be
1% of the loan amount disbursed.

Soft Loan for PV Water Pumping Systems
Users of PV water pumping systems and intermediaries are eligible to avail a soft loan at
the rate of 5% / 2.5% per annum respectively for 90 % of the remaining unsubsidised part
of the price of the SPV water pumping system. The loan can be repaid in maximum of 10
years in installments, beginning at the end of the first year after sanction of loan.
2.2 Solar Thermal Systems
Financial Grants for Solar Thermal Power Plant
Implemented by the Rajasthan State Power Corporation Ltd. (RSPCL), the Indian
government will provide a grant of Rs 50 crore; the World Bank/Global Environment
Facility (GEF) will provide a grant of $49 million, including technical assistance of $4
million, while the Government of Germany, through KfW, will provide a composite loan
of 250 million DM. The Government of Rajasthan will provide equity of Rs 50 crore, and
a loan of Rs 200 crore, if required. A consultant for preparing the Request for
Qualification (RfQ) and Request for Proposal (RfP) has been finalised.

MNES Financial Incentives for Solar Thermal Systems
Sl
No
Rs 4,000 per sq. m of
Demonstration Programme on Solar Water Heating Systems - For NE installed collector area
1
states, islands, J&K and Sikkim (Special Demonstration Programme) (Rs. 6,000 per sq. m for
States of NE and Sikkim)
Financial assistance:
Rs 3-5 lakh non-
recurring
Rs 0.50 lakh
2 Aditya Solar Shops recurring for two
years
Rs 1 lakh for
publicity
Interest Subsidy
Rate of
Technology Implementing Organisation Category of End-user
Interest
Individual, institution,
5%* (to
Solar water heating system Banks/HUDCO, etc association, small
end-user)
business establishment
IREDA (through financial
intermediaries). IREDA provides Individual, institution,
5%* (to
Solar water heating system loans to financial intermediaries association, small
end-user)
@ 2.5% rate business establishment
of interest
Solar water heating system (any Institutions, trusts,
capacity), solar air heating IREDA (direct or through charitable organisations,
5% *
system, solar desalination financial intermediaries)** etc (non-profit
system, solar swimming pool organisations)
Solar water heating system (any Industry, hotels and other
capacity), solar air heating IREDA (direct or through commercial
7%
system, solar desalination financial intermediaries)** organisations (profit-
system, solar swimming pool making)
* End-users (other than individuals) will have to give an undertaking that no
depreciation allowance will be claimed under Income Tax rules
** The financial intermediaries may charge a spread up to 4% over the rate charged
from them by IREDA

IREDA Financial Package for Solar Thermal Systems
Interest Promoter's
pa) (%)
Up to 70% of
Manufacturers of
equipment
cost
Equipment Financing
Up to 80% of
Non-profit-making
Institutional Users
cost
Up to 80% of
Profit-making
Institutional Users
cost
Up to 80% of
Domestic
Intermediaries
cost
Other than
Domestic- Up to 80% of
Non-Profit making 12.50 6 1 20 total project
and claiming 100% cost
depreciation
Solar Water Heaters

A solar water heater consists of a collector to collect solar energy and an insulated storage
tank to store hot water. Based on the collector system, solar water heaters can be of two
types:
Solar water heaters based on Flat plate
Collectors (FPC based SWH)
Here the solar radiation is absorbed by flat
plate collectors which consist of an insulated
outer metallic box covered on the top with
glass sheet. Inside there are blackened metallic absorbe (selectively coated) sheets with
built in channels or riser tubes to carry water. The absorber absorbs the solar radiation
and transfers the heat to the flowing water.
Solar water heaters based on Evacuated Tube Collectors (ETC based SWH)
Here the collector is made of double layer
borosilicate glass tubes evacuated for
providing insulation. The outer wall of the
inner tube is coated with selective absorbing
material. This helps absorption of solar
radiation and transfers the heat to the water
which flows through the inner tube.
Solar water heating is now a mature technology. Wide spread utilization of solar water
heaters can reduce a significant portion of the conventional energy being used for heating

water in homes, factories and other commercial and institutional establishments.
Inetrnationally the market for solar water heaters has expanded significantly during the
last decade. It is estimated that around 40 million sq. m. of collector area has so far been
installed world wide for heating water. In the country, the collector area so far installed
for water heating is over 650,000 sq. m.
Salient Features
Hot water at 60-80 C for hotels, hospitals, restaurants, dairies, homes, industry
etc.
Solar water heaters (SWHs) of 100-300 litres capacity are suited for domestic
application.
Larger systems can be used in restaurants, canteens, guest houses, hotels,
hospitals etc.
Fuel Savings:
A 100 litres capacity SWH can replace an electric geyser for residential use and saves
1500 units of electricity annually
Avoided utility cost on generation:
The use of 1000 SWHs of 100 litres capacity each can contribute to a peak load saving of
1 MW.
Environmental benefits

A SWH of 100 litres capacity can prevent emission of 1.5 tonnes of carbon-dioxide per
year.
Life: 15-20 years
Approximate cost:
Around Rs. 18000 for a 100 litres capacity SWH
Rs. 110-150 per installed litre for higher capacity systems
Payback period:
2-3 years when electricity is replaced
4-5 years when furnace oil is replaced
6-7 years when coal is replaced
Though the initial investment for a solar water heater is high compared to available
conventional activities, the return on investment has become increasingly attractive with
the increase in prices of conventional energy. The pay back period depends on the site of
installation, utilization pattern and fuel replaced. To offset the high initial investment for
solar water heaters, the Ministry is currently implementing a soft loan programme
through seven designated banks and Indian Renewable Energy Development Agency
(IREDA).
Soft Loan Scheme on Solar Water Heaters

Under the Interest Subsidy Scheme of the Ministry, soft loans are provided by the
designated banks for installation of
Solar water heaters based on Flat plate Collectors (FPC based SWH)
Solar water heaters based on Evacuated Tube Collectors (ETC based SWH)
Any individual, institution, association, small business establishment is eligible for this
loan upto 85% of the cost of the system at an interest rate of 5% per annum repayable in
5 years. End-users (other than individuals) will, however, have to give an undertaking
that no depreciation allowance will be claimed under income tax rules. Hotels will not be
eIigible for the subsidized interest rates on loans offered by banks.
Solar water heaters of capacity up to a maximum of 5000 litres are eligible for soft loans
from banks.
The housing cooperatives societies and the developers of real estates are eligible for soft
loans for installing solar water heaters in bulk at an interest rate of 5% since the systems
are ultimately being used by individuals. However, the borrowers will have to give an
undertaking that no depreciation allowance would be availed.
An additional amount of Rs.300 will also be made available by MNES to the banks as
promotional incentive / business development charge for each loan disbursed irrespective
of the size of the system. As soon as a loan is disbursed, an amount of Rs.300 can be
debited by the bank to the MNES interest subsidy account. The funds so collected /
accumulated can be used for the' following purposes and in the following manner by the
bank:

Publicity expenses including advertisements, posters, brochures etc.
Commission to motivators / agents who bring in loan applications from potential
buyers of solar products.
Other business development charges relating to solar energy products.
In order to keep the interest of the motivators/agents alive, it is advisable that the
commission to the motivators/agents be paid at the branch level itself and a debit
advice sent to the nodal branch/headquaters.
Soft Loan Scheme on Solar Water Heaters
Terms of Loans under the Bank Scheme
Capacity Up to 2,000 litres of hot water at 60-80C per day

Loan amount 85% of the ex-factory or ex-showroom cost of the system
Interest rate for soft loan 5% per annum
Loan repayment period 5 years
Repayment starts at 3 months after the release of funds to the consumers
For defaulted loans, banks may charge penal interest @ 2%
Penalty for defaulted loans
over and above the stipulated interest rate
Any individual, institution, association, business establishment
Eligibility for loan
etc.
Solar Water Heaters based on Flat Plate Collectors (FPC based SWH) Flat plate
collector specification as per ISI 12933:1992
Suppliers of solar water heaters with BIS (Bureau of Indian
Eligible suppliers
Standards) approved solar collectors
Upper limit of cost of solar water heating systems to be financed by banks (for calculating
loan amount)
System with collector
Approximate capacity Cost
area
1 no. collector system (2
100 litres Rs. 18,000
sq. m approx.)
2 nos. collector system (4
200 litres Rs. 35,000
sq. m approx.)
3 nos. collector system (6 300 litres Rs. 50,000

sq. m approx.)
400 litres Rs. 65,000
sq. m approx.)
500 litres Rs. 80,000
sq. m approx.)
6 nos. collector system
and up to 20 nos. collector 600 litres to 2000 litres Rs. 14,500 for each collector
system
i.e. for 10 nos. collector
1000 litres Rs. 1,45,000
system (20 sq. m approx.)
For 15 nos. collector
1500 litres Rs. 2,17,500
2000 litres Rs. 2,90,000
system and onwards up to 2100 litres to 5000 litres Rs. 12,000 for each collector
50 nos. collector system
Suppliers will be responsible for maintenance of the systems
Maintenance guarantee for 5 years and it will form part of unit cost to be financed by
the banks as per above guidelines
The cost indicated above includes the cost of collector, insulated hot water storage tank, system pipings,
instrumentation, controls etc. The cost also includes maintenance responsibility of the systems by the
manufacturers for five years. The bank will provide 85% of the cost of the system as soft loan.
Solar Water Heaters based on Evacuated Tube Collectors (ETC based SWH)
Individual Tube Length: 150 cm
Outer diameter of the tube: 47 mm

Eligible Suppliers Suppliers of solar water heaters based on ETCs approved by MNES
System Capacity No. of Storage tank Upper limit of cost of the solar water heating
(notional) Tubes capacity system (Rs.) (for calculating loan amount)
50 litres 7 7 x 1350 = Rs. 9500
75 litres 11 70-80 11 x 1318 = Rs. 14500
100 litres 14 100 14 x 1286 = Rs. 18000
200 litres 28 150-175 28 x 1250 = Rs. 35000
250 litres 34 200-220 34 x 1250 = Rs. 42500
300 litres 40 230-260 40 x 1250 = Rs. 50000
400 litres 52 340-370 52 x 1250 = Rs. 65000
500 litres 64 400-425 64 x 1250 = Rs. 80000
From 600 litres to 2000 litres, 12 tubes per 100 litres. Cost Rs. 1207 for each tube; total cost rounded
off as follows:
600 litres 72 72 x 1207 = Rs. 87000
1000 litres 120 120 x 1207 = Rs. 145000
1500 litres 180 180 x 1207 = Rs. 217500
2000 litres 240 240 x 1207 = Rs. 290000
From 2000 litres to 5000 litres, 12 tubes per 100 litres. Cost Rs. 1000 for each tube
3000 litres 360 360 x 1000 = Rs. 360000
4000 litres 480 480 x 1000 = Rs. 480000
5000 litres 600 600 x 1000 = Rs. 600000
Maintenance Suppliers will be responsible for maintenance of the systems for 5 years and it
guarantee will form part of unit cost to be financed by the banks as per above guidelines.
The cost indicated above includes the cost of collector tubes, back reflector, double jacketed stainless
steel tank with PUF insulation of minimum 50 mm thichkness, collector stand made of mild steel
(powder/plastic coated). The systems may consist of tubes, the number of which may be different than
what has been indicated above. For the pupose of loan, the cost of such a system may be determined
based on the cost of each tube in the same capacity range. For example, the indicative cost of a system
with 12 tubes will be: 12 x Rs. 1318 = Rs. 15800 (approximately). The capacity of the system indicated
is notional since the amount of hot water likely to be delivered depends on the solar radiation
availability which varies from location to location. The cost also includes maintenance responsibility of
the systems by the manufacturers for 5 years. The bank will provide 85% of the cost of the system as
soft loan.
SOLAR COOKERS
MNES Financial Incentives for Solar Cookers
A. Promotional Scheme
i) Incentive to State Nodal Agencies (SNAs) and associated promoters for promotional
activities/service charges, etc:

ii) Support to reputed NGOs/universities/institutions/Regional Test Centres etc
Up to a maximu of Rs. 1.50 lakhs, towards organization of promotional activities like
publicity, cooking demonstrations/competitions, seminars/workshops, evaluation studies,
development of improved models, etc. on solar cookers based on specific proposal
received from them in the prescribed format.
(This support is also extended to SNAs for organizing workshops/seminars/training
programmes/business meets on solar cookers)
iii) Support to manufacturers for taking BIS Approval
Reimbursement of BIS fee (including application and marking fee and test charges),
directly by MNES on 100% basis during 1st year and on 50% basis during further years
of 10th Plan (subject to modification, if any), on submission of approval certificate and
copies of necessary bills/receipts issued by BIS. The BIS standards for Box Solar
Cookers are IS 13429: 2000 (3 parts).
B. Demonstration Scheme on installation of Concentrating Solar Cookers
Support to users* Service charges to SNAs for

Type of solar cooker
(Rs. /%) implementation & monitoring
50% of total cost,
Dish solar cooker
limited to Rs. 2,500/- Rs. 250 per cooker
(Minimum diameter 1.4m)
per cooker
Community solar cooker
50% of total cost,
for indoor cooking
limited to Rs. Rs. 2,500 per cooker
(Minimum aperture area 7
25,000/- per cooker
sq.m)
50% of eligible 1 to 2% of MNES support
capital cost, as depending on system capacity
Solar steam cooking system
agreed upon by the (Higher % for lower capacity
Ministry system)
* This amount of support will be available during next financial year also where after it
will be reduced for remaining years of 10th Plan. For solar steam cooking systems the
support is also made available if they are used for other applications also like drying,
sterilization, water pasteurization besides cooking.
ADITYA SOLAR SHOPS
MNES Financial Incentives for Solar Cookers
A. Establishment of shops owned by State Governments/agencies
i) Non-recurring grant : Rs. 5 lakhs for construction/purchase & furnishing or
Rs. 3 lakhs for renovation including rent for one year
ii) Recurring grant : Rs. 0.50 lakhs/year for 2 years
iii) Grant for inauguration : Up to Rs. 35,000/- (to be considered on merit basis)
Rented shops run by Government Agencies are supported only if agencies agree to bear
the rent on a long term basis, after the initial support of MNES.
B. Establishment of private Aditya Shops/Solar Counters
- Rs. 50,000/- per Aditya shop and Rs. 20,000 per solar counter, as a one-
time grant for meeting the expenditure on furnishings and fittings, sign
boards etc.

C. Publicity of Aditya shops
- Rs. 50,000/- per shop/year to a maximum of Rs. 10 lakhs to each state.
2.3 Hybrid Systems
WIND ENERGY SYSTEMS
MNES Financial Incentives for Wind Pumps and Wind Battery Chargers/Wind-
Solar hybrid systems
Sl
No
Rs 20,000-45,000 per wind mill depending on its
1 Wind Pumps
design
75% of ex-works cost subject to a maximum of Rs
2 lakh per kW for community applications, direct
Wind Battery use by Central/state government, Defence, etc
2 Chargers/wind/solar hybrid
systems 50% of ex-works cost subject to a maximum of Rs
1.25 lakh per kW for individuals, academic
institutions and industrial use
3.0 Rural Energy Technologies
3.1 Biogas
Financial Incentives during 2002-2003 under NPBD (Family Type)
Amount of
Category Central Subsidy Central
per plant Subsidy
Northeastern region states and Sikkim, except plain areas of Assam Rs. 11,700/-
Plain areas of Assam Rs. 9,000/-
Jammu & Kashmir, Himachal Pradesh, Uttaranchal (excluding terai region),
Niligiris of Tamil Nadu, Sadar Kursoong and Kalimpong sub-divisions of the Rs. 3,500/-
Darjeeling distt (WB), Sunderbans, Andaman and Nicobar Islands
Scheduled Caste, Scheduled(MBA
RAGHURAM.C.SORAGAVI Tribe,IN
desert
POWERdistricts, small and marginal
MANAGEMENT)
farmers, landless labourers, terai region of Uttaranchal, Western Ghats and Rs. 2,300/-
139
other notified hilly areas
All Others Rs. 1,800/-
Other Forms of Incentives for Biogas Plants under NPBD
Turn-key job fee linked with three years free maintenance warranty:
A sum of Rs 800 per plant is given in northeastern region states (excluding plain areas of
Assam), Sikkim, Jammu & Kashmir, Himachal Pradesh and hilly districts of Uttar
Pradesh, Andaman & Nicobar Islands and Lakshadweep, whereas Rs 700 per plant is
given in all states.
Financial support for repair of old non-functional plants:
Financial support limited to 50% of the rate of Central subsidy, as applicable for different
categories of beneficiaries and areas, is admissible for repair and revival of family type
biogas plants, which are at least five years old and which are in disuse at present for want
of structural repairs.
Service Charges to State Nodal Departments and Implementing Agencies
Target Range
Amount of Service Charges
(Nos.)
100-3,000 plants Rs 0.50 lakh + Rs 300 per plant in excess of 200 plants
3,001-7,000
Rs 8.90 lakh + Rs 150 per plant in excess of 3,000 biogas plants
plants
Above 7,001 Rs 14.90 lakh + Rs 100 per plant in excess of 7,000 plants subject to
plants a maximum of Rs 30 lakh

Northeastern region states, Jammu & Kashmir and Sikkim are given grant for specific
staff sanctioned at the state and for districts on 100% basis.
Communication and Publicity
Target Range (Nos.) Amount

Up to 1,000 plants Rs 1 lakh
1,001-10,000 plants Rs 2.50 lakh
More than 10,000 plants Rs 5 lakh
Demonstration on the use of digested slurry: Rs. 50,000 per demonstration
Cattle dung based power generation plants and marketing of manure
(i) Rate of CFA
Installed capacity of Power Station Central Financial Assistance (CFA) rates

100-250 kW Rs. 30,000 per kW
250 - 500 kW Rs 75.00 lakh plus Rs. 25,000 per kW (ii)
Financial support for preparation of DPR: Rs. 1.00 lakh per site for projects up to 250
kW, Rs. 2.00 lakh per project above 250 kW

3.2 Improved Chulhas (Cookstoves)
Financial Incentives during 2001-2002 under NPIC for Chulhas
Amount of Central
Type of Chulha
Subsidy per chulha
Durable fixed type chulhas with chimneys
(i) N.E. Region states and Sikkim Rs 270/-
(ii) Other states Rs 80 /-
Portable Chulha
(i) N.E. Region states & Sikkim Rs. 135/-
(ii) Islands and notified hilly and desert areas Rs. 75/-
(iii) SC/ST beneficiary in other States/UTs Rs. 50/-
High altitude chulha
(i) N.E. Region states & Sikkim Rs. 450/-
(ii) Jammu & Kashmir, Uttaranchal, Himachal Pradesh
Rs. 450/-
and Hilly Districts of West Bengal
Hilly Districts of West Bengal Maximum up to Rs. 250/-
Other Forms of Incentives for Chulhas under NPIC
SEWs charges for construction and maintenance of improved chulhas
Single pot fixed chulha with chimney - Rs 30 per chulha
Two/three pot fixed chulha with chimney and community chulha - Rs 40 per chulha
Dealership support for fair price shops, and cooperative stores and private
retailers - Rs 5 per chulha
Support for organisational infrastructure - Rs 4 per chulha to state government
nodal departments and agencies

Support for state-level publicity awareness: A minimum support of Rs 30,000 is
given to the states and agencies having an annual target of up to 15,000 improved
chulhas. The other states and agencies which have an annual target of more than
15,000 chulhas are entitled to receive funds @ Rs 2 per chulha, with an upper
ceiling of Rs 2.50 lakh
Training support: @Rs 16,000 per SEW Course; Rs 10,000 per Trainers Training
Course; Rs 27,000 per Entrepreneurship Development Course; and Rs 1,000 per
Users Course
Support for Technical Back-up Units - @ Rs 8 lakh to Rs 10 lakh per year
Support for Fixed Chulha Moulds - @ Rs 1,500 per village panchayat
4.0 New Technologies
4.1 Battery-operated Vehicles
MNES Financial Incentives for Battery-operated Passenger Vehicles
Sl
No
50% of the price of BOPV excluding
Battery-operated Passenger Vehicles
1 excise duty, sales tax and all other
(BOPVs): 10 seaters and bigger capacity
levies.
Subsidy and Incentives:
The amount of subsidy will be fixed at the rate of Rs 125 per peak Watt subject to
maximum of Rs 1,50,000 to be reimbursed to the manufacturer/supplier upon satisfactory
proof of the supply and installation of system. Further 100% depreciation is available in
the first year.

IREDA Financial Assistance for Battery Powered Vehicles
Interest Moratorium Promoters

Repayment Lending
(yrs) Norms
pa) (max) (yrs) (%)
Battery- Up to 70% of
powered 12.50 8 2 30 total project
Vehicles cost
Equipment Financing
Battery- Up to 75% of
powered 12.50 5 1 25 total project
Vehicles cost
5.0 Energy Efficiency
5.1 Energy Efficiency Projects and Equipment
IREDA Financial Package for Energy Efficiency Projects and Equipment

Interest Moratorium
Repayment Promoters Lending
Category Rate (%
(yrs) Contribution (%) Norms
pa) (max) (yrs)
Project Financing
Up to
70% of
Commercial and Industrial sector 11.50 10 2 30 total
project
cost
Up to
70% of
Domestic sector 11.00 5 1 30 total
project
cost
Up to
70% of
Agricultural sector 11.00 10 2 30 total
project
cost
Energy Efficiency/Conservation Systems and Equipments (including DSM)
Equipment Financing
Up to
75% of
Commercial and Industrial Sector 12.00 10 2 25 total
project
cost
Up to
75% of
Domestic sector 11.50 5 1 25 total
project
cost
Up to
75% of
Agricultural sector 11.50 10 2 25 total
project
cost
Manufatcuring of Equipments/Facilities
Up to
70% of
All Energy Efficiency/Conservation
12.50 8 2 30 total
systems and Equipment
project
cost
6.0 Miscellaneous
6.1 Miscellaneous Schemes

Interest Moratorium Promoters

Repayment
Category Rate (% Contribution Lending Norms
(yrs)
pa) (max) (yrs) (%)
Infrastructure loan The advance should not
5.00 8 2 -
under BDA Scheme exceed Rs. 3 lakhs
Renewable
Line of Credit: Minimum Rs.
Energy/Energy
10.00 10 2 - 25 lakhs & maximum Rs. 1
Efficiency umbrella
crore
Financing Schemes
The term loan will be up to
70% of last 3 years average
expenditure on promotional
efforts (or the previous year's
of operation in case of
applicants with less than 3
Market Development years of operation). In case of
Assistance (including 10.50 5 1 30 new companies/enterprise the
Export Promotion) term loan will be uo to 70%
of the estimated expenditure
for the activity. Minimum
loan of Rs. 2.50 lakhs and a
maximum of Rs. 10.00 lakhs
per client subject to
availability.
Establishment of
Energy Centers 12.50 7 2 30 Up to Rs. 50 lakhs
(a) A1 & A Cities
(b) B1 & B2 Cities 12.00 7 2 30 Up to Rs. 30 lakhs
(c) Other cities &
District/
11.50 7 2 30 Up to Rs. 20 lakhs
Block/Taluk/Mandal/
Tehsil/Headquarters
Electrification of
remote villages
11.00 10 2 20
(projects implemented
in ESCO model)

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BUSINESS OPPORTUNITIES FOR RENEWABLE ENERGY IN INDIA

in the following order:

Power Generation Technologies

Power Generation Technologies

Energy from Wastes

Solar Energy Technologies

Stand-alone Wind Energy and Hybrid Systems

RAGHURAM.C.SORAGAVI (MBA IN POWER MANAGEMENT) 1

Rural Energy Technologies

Improved Chulhas (Cookstoves)

Chemical Sources of energy

Alternative Fuels for Surface Transportation

RAGHURAM.C.SORAGAVI (MBA IN POWER MANAGEMENT) 2

Power Generation Technologies

2.1 Power Generation Technologies

areas are given in the next page.

These technologies are discussed in detail in the chapters ahead.

Cumulative Achievements of Renewable Energy Programmes in India

Cumulative India's Position in

RAGHURAM.C.SORAGAVI (MBA IN POWER MANAGEMENT) 3

2.2 Wind Power

However, the technical potential is limited to about 13,000 MW.

power density (MAWPD)

The Wind Resource Assessment Programme (WRAP) carried out in India to

has so far identified 208 potential sites in 13 states

consumption, and the rest sold to the grid or to a third party

RAGHURAM.C.SORAGAVI (MBA IN POWER MANAGEMENT) 4

Demonstration Programme, resulting in a capacity of 65 MW

components, achieving an annual turnover of Rs 1,500 crore. Wind electric

generators ranging from 55 to 1250 kW rating have been developed and

manufactured in the country by using the latest technologies.

State-of-the-art wind power technologies are now indigenously available in India.

An annual production capacity of 500 MW has been established. Wind electric

generators up to 1250 kW unit capacity are now being manufactured.

Blades, a crucial component of wind turbines, is manufactured in India. Nearly 80

per cent indigenisation has been achieved

R&D activities undertaken through research institutions, laboratories, technical

o State-of-the-art wind R&D centre and field-test station established

o A project on the "Development of an Intelligent Power Controller for

Wind Electric Generators (WEGs)" has been undertaken by the

Electronics Research & Development Centre (ERDC), at

Thiruvananthapuram to maximise generation and reduce reactive power

o A project on "Power Quality and Integration of Wind Farms in the Grid"

has been taken up jointly by ERDC, Thiruvananthapuram, in collaboration

with institutions from Denmark to prepare guidelines for the integration of

RAGHURAM.C.SORAGAVI (MBA IN POWER MANAGEMENT) 5

RAGHURAM.C.SORAGAVI (MBA IN POWER MANAGEMENT) 6

STATE-WISE/YEAR-WISE GENERATION FROM WIND POWER PROJECTS (kWh)

States 2000-01 2001-02 2002-03 2003-04 Total

Cost of generation is estimated to be Rs 2.25-2.75 per kWh (depending upon the

These costs compare favourably with new conventional power projects

There is the added advantage of short gestation, and modularity of systems

support to state government projects

RAGHURAM.C.SORAGAVI (MBA IN POWER MANAGEMENT) 7

Aims and Targets

generation in the country, through:

The implementation of a countrywide WRAP

Implementation of demonstration projects to create awareness and opening up of

new sites; close involvement of utilities and industry

development of infrastructure capability and capacity for manufacture,

installation, operation and maintenance of wind electric generators

Adaptation of technologies for improved performance of turbines at low to

reliability, and increased life of turbines

investment of Rs 7,500 crore. Most of this investment is expected to come from