Gujarat govt announces relaxations for MSME units in existing Solar Power Policy in order to further encourage solar power generation

Gandhinagar: The Government of Gujarat today announced special relaxations for MSME (Micro, Small & Medium Enterprises) sector industrial units in solar policy declared by the State government in year 2015. The government said this decision has been taken to encourage the industries to scale up solar power generation.

– Caps on load and capacity are removed. Earlier, there was a cap of 50% of approved load for solar project installation. Now onward, MSME units will be allowed to install over 100% of approved load solar energy system.

– MSME units at present give Rs. 8 to power companies for usage. Now onward with solar power generation, they shall enjoy Rs. 3 benefit.

– MSME units that generate solar energy on own land will witness around Rs. 3.80 benefit while those generating solar power on rented land will witness estimatedly Rs. 2.75 benefit.

– MSMEs will also be allowed to purchase solar energy from third party.

– If MSME units lack facility for solar power generation, they will have option to generate solar power in rented land elsewhere.

– After using solar power as per need, MSME units will be able to transfer surplus solar power to solar energy greed. The State government run power company will purchase for Rs. 1.75 per unit.

– The government said, this decision has opened the gates in direction of win win situation for solar power generating MSME units. There are more than 33 lakh MSME units. The government wishes to encourage them for solar power generation in order to make Gujarat a leading state in solar power sector.

– Solar power generating units will need to pay electricity duty and wheeling charges as per rules.

Official release by CMO

CM announces important changes in Gujarat Solar Power Policy 2015

Gandhinagar, Thursday:  Chief Minister of the state Mr. Vijay Rupani and Deputy Chief Minister Mr. Nitin Patel, in the presence of Energy Minister Mr. Saurabh Patel, have taken an industrial and environmental friendly decision in order to ensure that the MSME sector is able to reap benefits of solar energy.

The Gujarat Solar Power Policy 2015 introduced by the state government promotes the use of solar energy. In order to ensure its outreach and accessibility, the state government has made necessary changes for production and use of solar energy by MSME sector.

Energy Minister Mr. Saurabh Patel stated that the MSME units in Gujarat, after the amendments in the policy, can now establish solar installations with a capacity of more than 100% compared to the previous limit of 50%.

At present, MSME units pay Rs.8 per unit for electricity consumption.The new decision will benefit the MSME sector and provide them a profit of Rs.3 per unit. The MSME units will obtain a profit of Rs.3.80 per unit if they produce solar energy on their own land and in case of leased land, they will obtain a profit of Rs.2.75 per unit.

Another advantage of this decision is that it will enable MSME units to purchase solar energy from third parties too. The units will be able to sell the excess solar energy to state government at a cost of Rs.1.75 per unit.

This novel initiative will provide a win-win situation for the MSME sector.  It is to be noted here that the Electricity Duty and Wheeling Charges shall have to be paid by the MSME units as per the existing norms.

The state government has decided to cover 8 lakh households by 2022 under the Solar Rooftop Policy. The changes in the Gujarat Solar Power Policy 2015 will encourage 33 lakh MSME units towards production and use of Green and Clean Energy.


Related reading

Gujarat Solar Power Policy 2015

What are Micro, Small & Medium Enterprises ?

Definitions of Micro, Small & Medium Enterprises In accordance with the provision of Micro, Small & Medium Enterprises Development (MSMED) Act, 2006 the Micro, Small and Medium Enterprises (MSME) are classified in two Classes:

1. Manufacturing Enterprises-he enterprises engaged in the manufacture or production of goods pertaining to any industry specified in the first schedule to the industries (Development and regulation) Act, 1951) or employing plant and machinery in the process of value addition to the final product having a distinct name or character or use. The Manufacturing Enterprise are defined in terms of investment in Plant & Machinery.

2. Service Enterprises:-The enterprises engaged in providing or rendering of services and are defined in terms of investment in equipment..

The limit for investment in plant and machinery / equipment for manufacturing / service enterprises, as notified,vide S.O. 1642(E) dtd.29-09-2006 are as under

Manufacturing Sector
Enterprises Investment in plant & machinery
Micro Enterprises Does not exceed twenty five lakh rupees
Small Enterprises More than twenty five lakh rupees but does not exceed five crore rupees
Medium Enterprises More than five crore rupees but does not exceed ten crore rupees
Service Sector
Enterprises Investment in equipments
Micro Enterprises Does not exceed ten lakh rupees:
Small Enterprises More than ten lakh rupees but does not exceed two crore rupees
Medium Enterprises More than two crore rupees but does not exceed five crore rupees


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