Rajasthan is blessed with two critical resources that are essential to solar power production: high level of solar radiation per square inch and large amounts of contiguous, relatively flat, undeveloped land.
It is apparent from the map below that the western states have the highest levels of solar radiation. The most intense solar radiation in the India is located in Rajasthan.
Rajasthan is uniquely placed to tap solar radiations with 300-330 clear sunny days and average daily solar incidence of 5-7kWh/m2 that is comparable to Deserts of California, Nevada, Colorado and Arizona.
The total desert area in the State is 208,110sq.kms. 60% of the land is arid and semi arid land in the State.
Characteristics of the Sector in Rajasthan
Solar has huge untapped potential on account of the State's high solar insolation level, the best in the country. Solar industry is expected to be an economic engine in Rajasthan creating jobs across the State and spur billions in economic growth and tax revenue along with powering remotely connected households.
Barmer, Bikaner, Jaisalmer and Jodhpur are the key regions with best solar radiation in the State. Daily average radiation ranges between 5kWh/m2 in north-eastern hilly areas and 7kWh/m2 in western regions.
The average daily solar radiations translates into 1600-2000 kWh/m2 leading to generation potential much higher than its present and expected yearly consumption.
Why Locate in Rajasthan
Rajasthan is uniquely placed to tap solar energy and is comparable to highest solar radiation in the world (Deserts of California, Nevada, Colorado and Arizona). The State is endowed with 300-330 clear sunny days and average daily solar incidence of 5-7 kWh/m2.
With a strong solar resource potential, the State has stimulated interest among several developers to commit a pipeline of generation projects. Rajasthan has highest allocation of projects (both Solar Photovoltaic - PV and Concentrated Solar Power - CSP) under Phase I of National Solar Mission.
The State accounts for 81% of the allocation under the Grid-connected scheme of National Solar Mission (NSM). Rajasthan has got highest number of projects (12 projects of 1MW each) under Rooftop & Small Solar Generation Programme. 52% of the total sanctioned projects are under Off-Grid Solar Application scheme of NSM.
(Source: National Solar Mission)
Land and Infrastructure
Rajasthan has competitive advantage based on the availability of relatively low cost land for industrial use. Adequate availability of electricity enables the development of solar manufacturing industry, which is energy intensive. The peak (3-5%) and average power deficits (1-2%) in State are reported to be lowest in the country.
The State has a comparative advantage on labour cost compared to its peer states (~20-30% lower). Proximity to NCR helps in access to industrial labour and managerial talent. Skills required in general manufacturing industry (such as glass) are easily transferable to solar manufacturing and related industries (specialized glass for Solar PV and Solar CSP), except high end R&D skills
The State has abundance of minerals such as zinc, quartz and salt (necessary for Solar CSP)
- The State accounts for about 99% of the country's production of zinc concentrates. The zinc concentrates are used for galvanization of mounting structures for Solar PV and CSP technology.
- Rajasthan has huge potential to become a solar glass manufacturing hub. Presently, around 500 operating ceramic units, covering glass and mineral, grinding units, etc. are present in the State.
- The State is the third largest producer of salt in India. The molten salt is used as a heat transfer fluid in the CSP technology.
- Rajasthan has got high concentration of building material industries such as steel, cement, stone and other chemicals in and around the State.
Rajasthan has excellent proximity to end user market as well as supplier base for raw material, providing logistics cost advantage. The State is well connected to major cities and towns of the State through railways.
The State is strategically placed on proposed Delhi Mumbai Industrial Corridor (DMIC). Nearly 60% of the State's area falls under the Project Influence Area (PIA). The major districts such as Jaipur, Alwar, Kota, Bhilwara and Dausa are expected to benefit from the DMIC. Also, 46% of the total propose DMIC PIA falls in the State.
Quality of Life
Jaipur and other cities house a broad array of primary and secondary schools. The State is home to several prestigious academic institutions.
The State has excellent medical facilities, including Fortis Escorts Hospital, Soni Group of Hosptials, Aravali Hospitals, Santokba Durlabhji Memorial Hospital, Bhagwaan Mahaveer Cancer Hospital & Research Centre and Narayan Hrudayalaya Health City.
It has a peaceful environment, good social infrastructure and strong tourism brand.
Solar Policy 2011
An investor friendly Solar Policy is already in place which aims to establish Rajasthan as a national leader in solar energy in phased manner by creating the policy frame work for promoting use of solar energy in various applications. Various incentives provided under the policy by the State Government are as follows:
Exemption from Electricity Duty
The energy consumed by the Power producers for own use will be exempted from payment of electricity duty.
Grant of Incentives available to industries
Generation of electricity from Solar Power Plants shall be treated as eligible industry under the schemes administered by the Industries Department and incentives available to industrial units under such schemes shall be available to the Solar Power producers.
Availability of water for power generation:
Water Resource Department will allocate required quantity of water from Indira Gandhi Nahar Project (IGNP) canal/the nearest available source for development of Solar Thermal Plants subject to the availability of water for power generation.
Power producer will intimate estimated water requirement to RREC along with source of water. After assessment/scrutiny, case of water requirement shall be forwarded to the Water Resource Department. The modification(s) required, if any, in the existing canal system shall be done by the Water Resource Department at the cost of the power producer.
Rajasthan Investment Promotion Scheme (RIPS) 2010
The Government has recently announced RIPS 2010 for setting up of new enterprise, enterprises going for expansion, modernization and diversification, and projects set-up for common social good. All kinds of investments are eligible under this scheme. The new scheme also simplifies the procedure for grant and disbursement of subsidy, and introduces transparency in system, by introducing the system of online disbursement of subsidy.
- Investment subsidy and Employment generation subsidy have been introduced.
- The maximum amount of subsidy shall be 50% of the tax deposited, i.e. VAT and CST or SGST(whenever introduced).
- RIPS 2010 provides investment subsidy to all eligible investors of an amount equal to 30% of the tax deposited, without any linkage with payment of interest and wages.
- Employment generation subsidy has been announced @ 10,000 per employee/annum. For women, SC/ST and persons with disability this amount has been enhanced to 12,000 per employee/annum.
- For entrepreneurs belonging to Women, SC/ST, or person with disability category, an additional investment subsidy amounting to 10% of the taxes deposited has been kept.
- These subsidies have been announced for 7 years, but to give boost to the MSMEs in thenotified area, time limit has been extended to 10 years.
- Procedure for subsidy disbursement has been simplified by introducing a Challan for Adjustment through Treasury (Form VAT-37B).
Exemption from Taxes
The RIPS 2010 scheme announces exemption from payment of various taxes under the following categories of investment:
1. New Enterprise and Project for Common Social Good
2. Investment made for Modernization/Expansion/Diversification
3. Sick Industrial Enterprise for its revival
The type, extent and period of exemption are as follows:
In case of enterprises going for modernization/expansion/diversification, the exemption from payment of tax(es) shall be allowed only to the extent to which additional tax liabilities accrue due to utilization of additional capacity created after modernization/expansion/diversification.
Few existing players in the State are: