Regulatory incentives

Power utilities will have to purchase 0.25 per cent of their power from solar sources in the first three year phase (from 2009 to 2012). For this they will receive a fixed incentive of Rs 10 per kWh. This may increase to 3 per cent in phase two which is from 2012 to 2017 (the third phase will last till 2020).

This tariff is fixed for all projects cleared in the first phase and will be paid for a fixed period of 20 years from the date of commissioning.

Fiscal incentives

Utility scale plants will receive a 10-year tax holiday, exemption from customs and excise duty on specific equipment and imports.

Off-grid solar photovoltaic systems of up to 10 kilowatts will be financed with a 10-year loan at a two per cent interest rate. They are anticipated to replace diesel generators and battery-based inverters.