The government has approved a proposal to increase the budget for implementation of solar rooftop systems to Rs 5,000 crore (about $752 million) from Rs 600 crore (nearly $90 million) under the National Solar Mission.
The Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi, cleared the new scheme with an aim to support installation of 4,200 MW of solar rooftop systems in the country by 2019-20.
The new scheme provides capital subsidy of 30 per cent to general category states and 70 per cent to special category states. The special category states are the northeastern states including Sikkim, Uttarakhand, Himachal Pradesh, and Jammu and Kashmir as well as Lakshadweep, and Andaman and Nicobar Islands.
There will be no subsidy for commercial and industrial establishments in the private sector since they are eligible for other benefits such as accelerated depreciation, custom duty concessions, excise duty exemptions and tax holiday.
The planned capacity of 4,200 MW will come up through the residential, government, social and institutional sector (hospitals, educational institutions).
So far, 26 states have notified their regulations to provide net or gross metering facilities to support solar rooftops installations.
A government statement said that electricity from solar rooftop systems can be generated at about Rs 6.50/kWh, which is cheaper than the power produced from diesel generating sets and is also lower than the amount most state utilities pay for power.
The government had earlier raised the target of the solar mission five times to 100,000 MW by 2022. Of this, 40,000 MW is to come through grid-connected solar rooftop systems.
This 40 GW will result in abatement of about 60 million tonnes of carbon dioxide per year and will help India fulfil its commitment toward mitigating the effects of climate change, the statement said.