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Rajasthan to levy extra cess on existing, future solar power projects

Thursday, 12 Dec 2019
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The government of Rajasthan has decided to levy an additional cess on all existing and future solar power projects in the range of Rs 2.5-five lakh per MW per year.

In its latest draft Solar Energy Policy, the state has also proposed a five-fold increase in registration fees. This is likely to increase project costs and renewable power tariffs in the state, which enjoys low rates due to high solar irradiation.

The new Rajasthan Solar Energy Policy-2019, which will replace the 2014 version, has introduced Rajasthan Renewable Energy Development Fund (RREDF) for promotion of solar energy in the state.

The state is levying the cess on solar power projects for the fund. In the draft policy, the state government has suggested that for any solar power project set up in Rajasthan which will sell power within the state, the cess will be Rs 2.5 lakh per MW per year.

A similar amount will apply to captive solar power units. For plants that will sell outside the state, the cess is Rs five lakh per MW per year. The solar power producer shall deposit the contribution towards RREDF by 30 April in every FY, without interest and up to 30 June with interest at nine percent per annum.

For a power plant with a capacity of 10-50 MW, the registration fee is Rs five lakh, and for 50-100 MW, it is Rs 10 lakh. For project sizes larger than 100 MW, a fee of Rs 30 lakh will be payable. Rajasthan has an installed solar capacity of 3,500 MW as on Q2/2019 and has 442 MW of solar projects under development.

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