Having good amount of solar radiation is not enough to entice solar developers. No wonder Germany is where it is 😀 Here we are reviewing the case of Rajasthan vs. Madhya Pradesh. Slowly and steadily, the latter has been upping its game by creating a solar friendly investment climate. Currently MP is placed third after Gujarat and Rajasthan in terms of solar power installed capacity.
MP seems to have an edge in three areas which are of supreme importance to developers:
- Low transmission and loss charges – Rajasthan has one of the highest transmission and loss charges in the country at around Rs. 1.84/unit which is almost three times of that in MP.
- Cost of Land – After the recent policy change in Rajasthan, the land rates have gone up. Earlier, solar developers used to get land at 10% of the district level committee rate but now the developers have to pay as per full rate. In MP on the other hand, solar developers are getting land at Re 1! However, the energy department in MP had raised concerns on this.
- Bureaucratic hurdles – Taking a cue from Gujarat, the MP government has simplified the process of clearances, approvals and inspections for setting up solar plants.
Bridge to India adds some important points in favor of MP – read them here.
It is a telling story that when recently, Tata Power Delhi Distribution Pvt Ltd invited proposals for 750 MW of solar plants under “open access”, most bidders chose Madhya Pradesh as the preferred location for their plant. Azure Power, which opted for Rajasthan and submitted three bids with two plants of 40 MW each and another of 20 MW, was rejected, mainly because of the high transmission and losses charges in Rajasthan, which makes the landed cost of solar power from Rajasthan higher than from Madhya Pradesh.