2020-05-21
MNRE issues draft guidelines for off-grid solar power plant scheme in RESCO mode

MNRE issues draft guidelines for off-grid solar power plant scheme in RESCO mode

The Ministry of New and Renewable Energy (MNRE) on Tuesday issued draft guidelines for the implementation of off-grid solar power plant in renewable energy service company (RESCO) mode.

RESCO model is considered one the most successful way to expand solar installation as it is a less capital intensive solar scheme. Here, the consumer pays only for the electricity generated, while the solar system is owned by the developer.

As per the Phase III of Off-grid and Decentralized Solar PV Applications Programme, off-grid solar power plants of individual size up to 25 kWp can be installed in areas where grid power has not reached or is not reliable. Such plants are mainly aimed at providing electricity to government schools, hostels, panchayats, police stations, and other public service institutions.

As per the guidelines the scheme is applicable only in the Northeast states of India for installation of off-grid solar PV plants through RESCO mode with Central financial assistance (CFA) of 90 percent of the benchmark cost of the system.

The guidelines state a RESCO model for solar PV systems was selected to ensure proper repair and maintenance of the off-grid solar power plants installed and promote efficiencies in operation, and CFA provided by MNRE would help reduce the financial burden which is otherwise very high in per-unit terms due to smaller size of plants and investments in storage batteries.

The guidelines provide design aspects for both isolated off-grid systems and grid-connected system and tariff estimation for two cases – one, in which subsidy is paid upfront, he levelized tariff discovered is Rs 5.96 per kWh and two, in which 50 percent subsidy is paid upfront and the balance after completion of five years, the levelized tariff is Rs 9.55 per kWh.

The guidelines propose that under RESCO model the vendor will install and operate the solar power plant of capacity up to 10 kWp for at least 10 years and solar PV plants of capacity above 10 kWp for at least 15 years. Solar power plants will be installed by the RESCO on a build, own, operate, and transfer (BOOT) basis. After completion of this time, the plant will be handed over to the beneficiary in operating condition.

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