INVESTMENT OPPORTUNITIES

FINANCIAL INCENTIVES AVAILABLE FOR RENEWABLE ENERGY

The Ministry of Non-Conventional Energy Sources provides financial incentives for

various renewable energy programmes.

Sector Programme/Systems

I. Rural Energy Biogas Plants

Improved Chulhas (Cookstoves)

II. Solar Energy Solar Photovoltaic Systems

Solar Thermal Systems

Solar Cookers

Wind Pump/Wind Battery Chargers

III. Power Generation Wind Power

Small Hydro Power

Biomass Power/Co-generation

Biomass Gasification

Solar Photovoltaic Grid connected Power

IV. Energy from Urban & Industrial Energy from Urban, Municipal & Industrial
Wastes Wastes

V. New Technologies Battery operated Vehicles (BOVs)

1 Financial Incentives/Subsidies available for Biogas Plants

(i) Central Subsidy :

Category Amount of Central

subsidy per plant.

North Eastern Region States and Sikkim(except plain areas Rs.11,700/-

of Assam)

For plain area of Assam Rs.9,000/-

Jammu & Kashmir, Himachal Pradesh, Uttaranchal Rs.4,500/-

(excluding terai region), Nilgiris of Tamilnadu; Sadar
Kursoongnd and Kalimpong, Sub-divisions of Darjeeling (Restricted to Rs 3,500/-
district (West Bengal), Sunderbans, Andaman & Nicobar for 1 Cu. M fixed dome
Islands. type)

Scheduled Caste, Scheduled Tribes, desert districts, small Rs.3,500/-

and marginal farmers, land-less labourers, terai regions of
Uttaranchal, Western Ghats and other notified hilly areas (Restricted to Rs 2,800/-
for 1 Cu. M fixed dome
type)
All Others Rs.2,700/-

(Restricted to Rs 2,100/-
for 1 Cu. M fixed dome
type)

(ii) Sanitarytoilet linked biogas plants : An additional central subsidy of

Rs.500/- per plant is given for linking plants with sanitary toilets.

(iii) Turn-key job fee linked with three years free maintenance
warranty : A sum of Rs.800/- per plant is given in North Eastern 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.

(iv) Service charges to State Nodal Departments and Implementing

Agencies :

Target Range (Nos.) Amount of Service Charges

100 - 3000 plants Rs.0.50 lakh + Rs. 300/- per plant in excess of 200 plants.

3001 - 7000 plants Rs. 8.90 lakh + Rs. 150/- per plant in excess of 3000 biogas plants.

Above 7001 plants Rs. 14.90 lakh + Rs. 100/- per plant in excess of 7,000 plants subject
to a maximum of Rs. 30.00 lakh.

North-Eastern Region States, Jammu & Kashmir and Sikkim are given grant for specific staff
sanctioned at the State and for districts on 100 per cent basis.

(v) Communication and Publicity :

Target Range (Nos.) Amount

Up to 1,000 plants Rs.1.00 lakh

1,001 – 10,000 plants Rs.2.50 lakh

More than 10,000 plants Rs.5.00 lakh

(vi) Financial support for repair of old non-functional plants : Financial support
limited to 50 per cent 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 dis-use at present for want
structural repairs.
 2 Financial Incentives/Subsidies available for Improved Chulhas (Cookstoves)

Sl. Programme/Scheme Amount of Subsidy per chulha

No.

Improved Chulhas:

1. Fixed Chulha with General - Rs.40/- and for NE, Sikkim - Rs.80
Chimney

2. Portable Chulha General category- Nil

Rs.50/- for Scheduled Castes/ Scheduled Tribes;

Rs.75/- for North-Eastern States, Sikkim, notified

hilly & desert areas.

3. High Altitude Chulha Rs.250/-

3 Financial Incentives/Subsidies available for Solar Photovoltaic
Systems

A1 – For General Areas.

S. SPV System Central Subsidy Service

N Charge
o.
1. Solar Lantern Rs.1300 /- (fixed) Rs.100/-
2. Home Lighting Rs. 5,500 or 50 % of Rs.200/-
Systems / Solar ex-works cost, which
Home System ever is less
3. Street Lighting Rs.11,000 or 50 % of -
System ex-works cost, which
ever is less
4. Power Plants & Rs. 1,80,000 / kWp of Rs.10,000/-
Other systems PV Array Capacity or
50 % of the ex-works
cost of the project,
which ever is less.

A2 – For North - Eastern Region, including Sikkim

S. No. SPV System Central Subsidy Service

Charge
1. Solar Lantern Rs. 3,000/- or 90 % of ex- Rs.100/-
works cost, which ever is less
2. Home Lighting / Rs. 10,000/- or 90 % of ex- Rs.200/-
works cost, which ever is less
Solar Home System
3. Street Lighting Rs. 20, 000/- or 90 % of ex-works -
System cost, which ever is less
4. Power Plants & Rs. 3,50,000 / kWp of PV array Rs.10,000/-
Other Community Capacity or 90 % of ex-works
Systems cost, which ever is less (for power
plants)
4 Financial Incentives/Subsidies available for Solar Thermal Systems

1. Subsidy:

Sl. Programme/Scheme
Amount of Subsidy
No.

1 Demonstration Programme on Solar Water Rs.4000/- per sq. m. of installed

Heating Systems- collector area

For NE, Islands, J&K and Sikkim Special

Demonstration Programme

2 Aditya Solar Shops Financial assistance:

• Rs.3-5 lakh non-

recurring.
• Rs.0.50 lakh recurring
for two years.

• Rs.1.00 lakh Publicity.

2. Interest Subsidy:

Technology Implementing Category of end- Rate of

Organization user Interest

Solar water heating Banks / HUDCO etc. Individual, 5%* (to

system (up to 2000 institution, end user)
litters capacity) association, small
business
establishment

Solar water heating IREDA (through financial Individual, 5%*

system (up to 2000 intermediaries). IREDA institution,
litters capacity) provides loans to financial association, small (to end
intermediaries @ 2.5% rate business user)
of interest establishment
Solar water heating IREDA (direct or through Institutions, trusts, 5% *
system (any capacity), financial intermediaries)** charitable
Solar air heating organizations etc.
system, solar (non-profit
desalination system, organizations)
solar swimming pool

Solar water heating IREDA (direct or through Industry, hotels and 8.3%
system (any capacity), financial intermediaries)** other commercial
solar air heating organizations (profit
system, solar making)
desalination system,
solar swimming pool

* 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.
5 Financial Incentives/Subsidies available for Solar Cookers
Sr.No. Programme/Scheme
1. Interest subsidy scheme
through IREDA
2. Interest subsidy scheme
through banks
3. Promotional scheme
4. Demonstration scheme on
concentrating solar cookers
for specified institutions
a. Community solar
cooker (Scheffler)
b. Dish solar cooker
(SK-14)
c.
d. Solar steam cooking
Amount of incentive/subsidy
a. Interest free loans to bulk users and
intermediaries e.g. NGOs, SNAs,
manufacturers and financial institutions.
b.
c. Soft loan to manufacturers for machinery
and equipment.
Interest free loans to individual users.
a. Grant-in-aid to SNAs for organizing
publicity, cooking demonstrations/
competitions/awareness campaign and
various other promotional activities which
could be used by NGOs and manufacturers
also. To manufacturers the support is on
50% cost sharing basis.
b.
c. To self-employed workers for selling solar
cookers ( @ Rs. 100/- per cooker through
SNAs )
Support to SNAs/ RTCs/ Reputed NGOs/
institutions as per the following based the on
suitable proposals received :
a. 50% of the cost of solar cooker subject to a
maximum of Rs. 25,000/-.
b. 50% of the cost of solar cooker subject to a
maximum of Rs. 2,500/-.
a. A maximum of 50% of the cost of the
system as grand-in-aid and rest soft loan
 system from IREDA

6 Financial Incentives/Subsidies available for Wind Pumps and Wind

Battery Chargers

Sl. Programme/Scheme Amount of Subsidy

No.

1. Wind Pumps: Rs. 20,000-45,000 per Wind Mill depending on design of

Wind Mill.

2. Wind Battery 80% of ex-works cost subject to a maximum of Rs.2.0

Chargers: lakh per KW for community applications, direct use by
Central/State Govt., Defence, etc.

50% of ex-works cost subject to a maximum of Rs.1.25

lakh per KW for individuals academic institutions &
industrial use.
7 Financial Incentives/Subsidies available for Wind Power

Sl.
Programme / Scheme Amount of Subsidy
No.

1 Wind Power :

Financial Assistance for Land Based Demonstration Projects: 60% of the

Wind Power cost of wind turbine equipment, maintenance spares,
Demonstration projects and erection commissioning, subject to eligibility and
provided to State Nodal ceiling of Rs. 3.5 crore/MW for determination of
Agencies/State Govts. CFA. However the ceiling in respect of all the Special
/State Electricity Boards. Category States and Islands (excluding those that are
Union Territories) would be Rs. 4 crore / MW.

Wind Hybrid Demonstration Projects: For wind

hybrid projects, cost of wind turbine and control
equipment, including spares and
erection/commissioning subject to a ceiling of Rs.70
lakhs per 100 KW, would be provided . In addition, up
to 90% of the cost of laying new, or upgrading/
extension of existing lines for decentralized
electrification in remote and inaccessible area such as
Islands, remote and difficult areas would be provided.
The cost of DG set(s) or its up-gradation and other
local works would be met by the State Governments.

Wind Resource Assessments: The cost of setting up

the wind monitoring stations would be shared between
MNES and State Nodal agencies in 80:20 ratio, except
for all Special Category States and unelectrified
Islands (excluding those that are Union Territories),
where it would be in 90:10 ratio

8 Financial Incentives/Subsidies available for Small Hydro Power

Sl. Programme/Scheme Amount of Subsidy
No.

1 Capital Subsidy for Small Hydro Projects upto 3MW Up to Rs. 3 Crores /MW
Station capacity in North East States. or 50% of the cost of the
project, whichever is
lower.

2 Capital Subsidy for Small Hydro Projects upto 100 @ Rs. 15,000/-per KW.
KW capacity, for Hilly region, N.E., and A&N Islands
for projects executed by Government Deptt.,
Agencies, NGOs, Local Bodies.

3 Interest Subsidy for Small Hydro Power Projects upto 5% interest subsidy upto
3 MW station capacity in the Hilly region, N.E. region Capitalized amount of Rs.
and A&N Island. 1.12 Crores per MW

4 Interest Subsidy for Small Hydro Power Projects upto Interest Subsidy for Small
3 MW station capacity for other areas. Hydro Power Projects
upto 3 MW station
capacity for other areas.

5 Renovation/Modernization and capacity up-rating of @ 75% of the R&M cost

SHP station upto 3 MW capacity. upto Rs.2.00 crore per
MW.

6 Assistance for Detailed Survey and Investigation 100% of the cost Subject
to a maximum of Rs. 1.5
lakh per site.

7 Assistance for DPR Preparation 50% of the cost subject to

a maximum of Rs. 1 lakh
per DPR.

8 Subsidy for development and upgradation of Water Mills

a. Mechanical Output only a. Upto Rs.30,000/- or

75% of actual cost

b. Mechanical and electrical output b. Upto Rs.60,000/- or

75% of actual cost
9 Pattern of Financial Assistance /Incentives for setting up of biomass

power/cogeneration projects

Bagasse Co-generation (Commercial Projects)

Schemes Pressure Interest Maximum Subsidy

Configuration Subsidy (Rupees)

1. Projects by Cooperative/Public/ 40 bar & above 3%
Joint Sector Sugar Mills

60 bar & above 4%

80 bar & above 5%

2. Projects in IPP Mode in 60 bar & above 2%

Cooperative/Public Sector Sugar
Mills 80 bar & above 3%

4.00 Cr.
3. Projects by Private Sector Sugar 60 bar & above 2%
Mills
80 bar & above 3%

Biomass Co-generation
4. Commercial Projects 60 bar & above 2%

80 bar & above 3%

2.00 Cr.

Biomass Power (Commercial Projects)

Schemes Pressure Interest Maximum Subsidy

Configuration Subsidy (Rupees)

1. Commercial Projects 60 bar & above 2%

(Direct Combustion, including

captive power 80 bar & above 3%

2. Commercial Projects -- 2%
(Atmospheric Gasification
including captive power) 2.00 Cr.
 3. MW-Scale projects with 100% Capital Subsidy of Rs.1.00 Cr./MW 2.00 Cr.
Producer Gas Engines
4. Advanced Biomass Gasification Capital Subsidy of Rs.1.00 Cr./MW

8.00 Cr.

For Bagasse Cogeneration by Cooperative/Public Sector Sugar mills, and Biomass Power
Projects in North-Eastern States & Sikkim, the floor rates of interest shall not be lower
than 8%, otherwise 10% for general category of projects

10 Financial Incentives/Subsidies available for Biomass Gasification

Type Percent of Cost

A BIOMASS GASIFIER WITH REACTOR, BLOWER, MANUAL FEEDING AND

MANUAL CUTTER ONLY : For Projects upto 1MW capacity (3 MWth, 2.6 million
kcal/hr) having CFA on benchmark on cost of Rs.4.25 lakhs for gasifier units of 100 KW

A1 Unit size upto 100 KWe (300 KWth, 2.5 lakhs kcal/hr)

a) Owned by Co-operative Panchayat, NGOs & 50%

Central/State Agencies (Socially Oriented Projects)

b) Owned by Individual(s) / Entrepreneur(s) 30%

A2 Unit Size > 100 kWe but < 200 kWe (600 KWth, 5.00 lakh kcal/hr)

a) Owned by Co-operative Panchayat, NGOs & 55%

Central/State Agencies (Socially Oriented Projects)

b) Owned by Individual(s)/Entrepreneur(s) 35%

A3 Unit Size > 200 Kwe

a) Owned by Co-operative Panchayat, NGOs & 60%

Central/State Agencies (Socially Oriented Projects)

b) Owned by Individual(s) / Entrepreneur(s) 40%

B. HI-FOCUS AREAS, ISLANDS, NE STATES, LADAKH & SC/ST USERS

 Additional Financial Assistance(Over and above) 10%

C. COMPULSORY ADD-ONS

I Instrumentation for Online Monitoring (System > 25% subject to maximum

100 KWe) of Rs.15000/-

a. Hours of Gasifier Operation (hours)

b. Output (kW)

c. Other Fuel (Diesel) Consumption (Ltrs/hr.)

II Total AMC for 5 years (including warranty) 5% of A above

D. OPTIONAL ADD-ONS

I Cooling and Cleaning Subsystem 25% of the sub systems

cost or Rs. 500/- per
Minimum Performance Level for gas cleaning; kWe/kWth whichever is
less
a. Gas Quality : > 4.0 MJ/nm3
b. Tar Content : < 100 mg / nm3
c. Particulate Matter : < 50 mg / nm3

Minimum Performance Level for gas cooling;

Temperature at Engine Outlet:

Ambient Temperature ± 50C or 400C

(Maximum)

II Automation for Startup (Battery based), Feed 25% of the sub systems
Handling and Ash Handling - for systems of Unit cost or Rs. 500/- per
Capacity > 200 kW kWe/kWth whichever is
less

III Biomass Pre Processing / Fuel Preparation

Equipment – for systems of Unit Capacity > 200 kW

a) Preprocessing Equipment 25% of the sub systems

cost or Rs. 500/- per
kWe/kWth whichever is
less

b) Fuel Preparation (Briquetting) Equipment (only in 25% of the sub-systems

 case of village electrification projects of Unit cost or Rs. 1000/- per kWe
Capacity ³ 500 kW). whichever is less

IV Effluent treatment for the gasifier cooling water

Treatment of gasifier cooling water for recycling 25% of the sub systems
cost or Rs. 500/- per
kWe/kWth whichever is
less

E. OPTIONAL ADD-ONS FOR ELECTRIFICATION

I Power Distribution Subsystem (Local) for village 100 %

electrification projects.

II Grid Inter-connection Subsystem

For electrification projects (> 100 kW e)

a) Socially oriented projects 50%

b) Individual/Entrepreneurs 25%

For industrial application projects (> 200 kWe) 25%

III Cost of Gas Engine (peak power delivered to be 100 %

Specified)

IV Dual Fuel Gensets

a). For all village electrification projects.(Diesel replacement > 70%)

i) Socially oriented projects 50%

ii) Individual/Entrepreneurs 25%

b). For industrial applications > 200 kW 25%(or @ Rs. 5,000/- per
kWe, whichever is less for
all categories

F. OPTIONAL ADD-ONS FOR PUMPSETS

I. Cost of Pump-sets

Project Size above 25 HP(Diesel replacement > 70%) 25% of the cost of the
pumpset or Rs.1500/- per
 HP whichever is less

Project Size below 25 HP(Diesel replacement >70%) 25% of the cost of the
pumpset or Rs.1200/- per
HP whichever is less

G. OTHER FEATURES

1. DPR for all project > 100 kWe necessary. CFA for DPR preparation for projects >
500 kW is Rs. 1.00 lakh, whereas for projects < 500 kW and > 100 kW is Rs.
50,000/-. No DPR for < 100 kW only basic information need be given on format.

2. One time need based funding upto Rs. 5.00 lakhs shall be given to approved
manufacturers by MNES for establishing service centres in potential areas where
minimum 10 gasifier systems have been set up.

3(a) CFA for professional technical services, including TEFR preparation @ upto Rs.
50,000/- per assignment plus TA as per actual (AC-First Class by Rail / Executive
Class by Air excluded).

(b) Applied, associated, allied and other strategic studies on scientific,

technical/engineering, management, financing, evaluation, industry-wise sectoral
studies etc, as may be required shall be considered for CFA on case to case basis,
upto a ceiling of Rs.10.00 lakh including innovative R&D, pilot projects involving
technology validation etc. to be considered by an Expert Committee headed by
Advisor & Head, Power Group.

4. 10 training courses @Rs.1.00 lakh per training course shall be arranged to create
trained manpower for different target groups.

5. 10 numbers Business Meet, Seminars, Workshops, Orientation Programmes under

publicity and awareness programme shall be arranged @Rs.1.00 lakh .

6. In High Focus Areas/Area based proposals, direct implementation through reputed

NGOs will also be permitted.

7. Rupees 1000/kW up to a maximum of Rs.1 lakh for 1 MW shall be provided as

implementation charges to SNAs only for promotion of power generation.

8. For village electrification projects, 25% of the cost of the system is to be

additionally provided towards transportation, foundation & machine room, erection
and commissioning of the project.
11 Financial Incentives/Subsidies available for Solar Photovoltaic
Grid-Connected Power Projects

Sl. Programme/Scheme Amount of Subsidy

No.

1 Solar Photovoltaic Grid-connected Power Projects: • 2/3rd of the

project cost
Solar Photovoltaic Grid-connected Power Projects for subject to a
niche applications, namely, voltage support systems at maximum of
the tail-end of the grid in rural areas and rooftop peak- Rs.2 crores per
shaving systems in Urban Centres. Projects to be 100 KW.
implemented by SEBs, SNAs and Private Electric
Utilities only. • Upto Rs.1.00
lakh for
preparation of
Detailed Project
Report.

• 2.5 % of MNES
share subject to
maximum of Rs.
5.00 lakh for
O&M, data
compilation etc.

12 Financial Incentives/Subsidies available for Energy from Urban,

Municipal and Industrial Wastes

Sl. Programme/Scheme Amount of Subsidy

No.

1 Capitalized Interest Subsidy For reducing rate of interest to 7.5 subject

to a maximum of Rs. 2.0 crore/MWe for
waste to power project, Rs. 1.0 crore/MWe
for fuel to power project and Rs. 0.50
crore/MWe for waste to fuel project.
2 Financial support for the preparation 50% of the cost, subject to a maximum of
of Detailed Project Report (DPR)/ Rs.2 lakh.
Techno-Economic Feasibility Report
(TEFR).

3 Incentive to Municipal Corporation/ Rs.15.00 lakh per MWe.

Urban Local Bodies for site clearance
/ facilitation/ coordinated actions.

4 Incentive to State Nodal Agencies for Rs. 5.00 lakh per Mwe.
their coordinated actions/ monitoring
etc.

5 Financial Support for Demonstration Upto 50% on cost sharing basis subject to a
Projects. maximum of Rs. 3.0 crore per MW for
specified projects.

13 Financial Incentives/Subsidies available for Battery Operated

Passenger Vehicles

Sl. Programme/Scheme Amount of Subsidy

No.

1 Battery Operated Passenger Vehicles 50% of the price of BOPV excluding

(BOPVs):10 seaters and bigger capacity excise duty, sales tax and all other
levies.