Professional Documents
Culture Documents
/1116 /2010-11
01 November 2010
Dear Sir,
1. The Ministry of New and Renewable Energy (MNRE), Government of India has
introduced a subsidy linked credit scheme for Solar Off-grid (Photo-voltaic & thermal)
and decentralized applications to promote commercial marketing of solar energy
systems and devices by extending financial incentives in the form of capital and interest
subsidy on loans availed from financial institutions by the target clientele. The scheme
provides for routing the capital subsidy and the interest subsidy on bank loans availed
of by the clients from the banking system for solar energy conversion/ user systems
and devices under this scheme through National Bank for Agriculture and Rural
Development (NABARD). “The Capital Subsidy – cum- Refinance Scheme for installation
of solar off-grid (photovoltaic & thermal) and Decentralised Applications” is being
introduced to enable the Banking system (Commercial Banks and RRBs eligible for
drawing refinance from NABARD) to avail of the financial resources including the
subsidies on behalf of their borrowers for creation of relative assets (technically termed
as phot-voltaic and thermal systems).
2. The details regarding the objectives, scope of the scheme, eligible institutions and
other terms and conditions governing the Scheme have been listed in the guidelines
appended hereto.
3. You are requested to give wide publicity to the scheme through all your branches
and to prefer drawal applications for claiming the capital subsidy/ subsidised refinance
under the scheme as per the scheme stipulations to the respective regional offices of
NABARD and thus help the objective of the Scheme to promote off-grid applications of
solar energy (both PV and Solar Thermal) , create a paradigm shift needed for
commorditization of off-grid solar applications and to encourage replacement of
non-renewable energy sources like fossil fuels, kerosene and diesel with solar energy to
meet the energy requirements.
4. MNRE, IREDA and NABARD would be providing web and non-web based technical
support besides training to the field level functionaries of the financing banks.
Yours faithfully,
Sd/-
(J.C.Mishra)
Chief General Manager
Encl: as above
CAPITAL SUBSIDY-CUM-REFINANCE SCHEME FOR
INSTALLATION OF SOLAR OFF-GRID (PHOTO-VOLTAIC AND
THERMAL) & DECENTRALISED APPLICATIONS UNDER THE
JAWAHARLAL NEHRU NATIONAL SOLAR MISSION –
GUIDELINES
1. Background
1.2 The use of solar powered systems and devises through application of Solar
Photo Voltaic (PV) and Solar Thermal methods have remained underutilized due
mainly to high unit costs. The key challenge is, thus, to provide an enabling
framework for expanding solar energy markets by bringing down the costs.
Against this background, the Ministry of New and Renewable Energy (MNRE),
Government of India has introduced a Scheme for Solar Off-grid (Photo-voltaic &
thermal) and decentralized applications to promote commercial marketing of
solar energy systems and devises by extending financial incentives in the form of
capital and interest subsidy on loans availed from financial institutions by the
target clientele. Thus the scheme provides for routing the capital subsidy and the
interest subsidy on bank loans availed by the clients from the banking system
for solar energy conversion/ user systems and devises under this scheme
through National Bank for Agriculture and Rural Development (NABARD). “The
Capital Subsidy – cum- Refinance Scheme for installation of solar off-grid
(photovoltaic & thermal) and Decentralised Applications” is being introduced to
enable the banking system (Commercial Banks and RRBs eligible for drawing
refinance from NABARD) to avail of the financial resources including the
subsidies on behalf of their borrowers for creation of relative assets.
2. Objectives
4. Eligible Institutions
5. Capital Subsidy
The quantum of capital subsidy and refinance would be made available as per
the specifications of MNRE/ IREDA from time to time. Currently the capital
subsidy would be to the extent of 30% of the benchmark cost subject to the
boundary conditions indicated in. For the year 2010-11, the benchmark price for
photo voltaic with battery back-up is considered as ` 300 per Watt Peak (Wp). In
respect of the systems which do not use storage battery such as water pumping
systems, the installed PV system cost would be considered subject to a cap of `
210 per Wp. Capital subsidy to be released will have to follow the fresh
benchmarks to be indicated by MNRE for this purpose. For Evacuated Tube
Collectors (ETCs) based solar water heating systems, capital subsidy will be
limited to ` 3000 per square metre of collector area while for Flat Plate Collectors
(FPCs) with liquid as the working fluid, the subsidy will be limited to ` 3300 per
square metre. For flat Plate Collectors with air as the working fluid, the capital
subsidy is limited to ` 2400 per square metre of collector area.
The borrowers are required to bring in 20% of the cost of the project as the
margin money for accessing credit facilities from banks to acquire the assets.
The loans to cover the balance (within the ceilings specified against each asset)
after reducing the eligible capital subsidy, would be extended with a repayment
period not exceeding 5 years and would carry an interest rate of 5% p.a. No
interest will, however, be charged by the financing banks on the capital subsidy
component.
8. Security
The loans extended under the scheme would be secured as per the existing RBI
guidelines in this regard.
The loan amount as per the eligibility availed by the target participants will be
repayable in suitable instalments not exceeding 5 years. The banks may fix the
repayment schedule of the loan having regard to the household cashflow of the
borrowers and the life of the assets so as to ensure full repayment of the loan
alongwith interest thereon within five years. The banks would be eligible to draw
100% of the loan outstanding (excluding the capital subsidy) as refinance from
NABARD on an automatic basis, (subject to the maximum loan amount indicated
in Annexure I) subject to usual conditions governing release of refinance from
NABARD. The refinance would carry an interest rate of 2% p.a. The refinance
claims under the scheme are to be preferred in the drawal application formats
appended hereto. The financing banks may prefer refinance claims on a monthly
basis (eg. loans disbursed by banks from 15th to next 15th can be claimed by say,
25th of the month and refinance will be released to banks as far as possible
within next 3-4 working days if the applications are otherwise in order).
Repayment of refinance alongwith interest would be made by the banks to
NABARD on a half-yearly basis i.e. as on 31 July and 31 January every year (in
respect of repayments fallen due during the immediately preceding 6 months).
Penal interest as per the existing policy of NABARD would be applicable for
default in repayment of the refinance as per the existing instructions of NABARD.
10. Monitoring
The financing banks will have to maintain separate records for loans/ subsidy
extended under the scheme and the details will have to be submitted to
MNRE/NABARD/ IREDA as and when required. MNRE/NABARD/ IREDA will also
have the right to inspect the books of accounts pertaining to such accounts
whenever required.
Appendix-1
Technical and Financial Parameters of Home Lighting Systems (pre-approved PV
models) to be financed
The total cost, the maximum capital subsidy and the maximum eligible quantum of subsidized loan
have been worked out on the basis of the benchmark cost of ` 300/- per Wp for 2010-11 prescribed
by MNRE. In case the actual cost of the system is less than the indicative costs mentioned above, the
capital subsidy and loan eligibility will be calculated @ 30% and 50% respectively of the actual cost.
Appendix 2
To
_______________________
Dear Sir,
2. We certify that:
Enclosure
Date :
Place :
A. Repayment Schedule
Certified that all the terms and conditions stipulated under the captioned scheme are
satisfied in case of all loans for which capital subsidy is claimed with this application and
that the capital subsidy claimed are within the monetary limits prescribed under the
scheme.
We have not applied earlier for capital subsidy covered by this drawal application from
NABARD or any other institution
Capital subsidy Account:
:`
2. Against claims made under Drawal Application
No.
:`
3. ……………… :`
It is certified that I/we have read the guidelines issued by the Ministry vide
5/23/2009/P&C dated 16th June, 2010 and the related provisions/terms and
conditions for availing financial support from the Ministry of New and
Renewable Energy and I/we agree to abide by these guidelines and related terms
and conditions.
I/we confirm that the proposed solar PV system(s) for which subsidy/ subsided
loan is being claimed have not been installed/supplied earlier .
A detailed site survey has been done/or will be undertaken to identify the
beneficiary before actual supply and installation takes place.
This is to certify that the various components of the SPV systems will conform to
the Relevant Standards, as mentioned in the Guidelines for Off-grid and
Decentralized Solar Applications (Annexure-3) for SPV modules and components
under JNNSM.
Signature _____________
Name & Designation
of Authorized Signatory
Seal
Place:
Date:
APPENDIX -1A
1. Individuals
A. All applications except 1B 1 kWp Capital Subsidy
B. Pumps for irrigation and community 5 kWp &
drinking water Interest Subsidy
2. Non-commercial entities
A. All applications except 2B 100 kWp per site Capital Subsidy
B Mini-grids 250 kWp per site &
Interest Subsidy
3 Industrial/Commercial entities
A. All applications except 3 B 100 kWp per site Capital Subsidy
B. Mini-grids for rural electrification 250 kWp per site or
Interest Subsidy
1. The capital subsidy/unit collector area, as given above, is based on 30% of the
benchmark costs which would be reviewed annually. Capital subsidy would
be computed based on the applicable type of solar collector multiplied by the
collector area involved in a given solar thermal application/project.
2. Besides the capital subsidy as proposed above, the pattern of support could
include a soft loan at 5%, as under :
a) Soft loan @ 5% interest would be available, inter alia, for balance cost
which may comprise installation charges, cost of civil work for large
systems and costs of accessories (viz. insulating pipeline, electric
pump, controllers and valves, additional water tanks, blower for air
heating systems, drying trays for solar dryers, steam system, etc.), etc.
b) To meet unmet demand for electricity and thermal energy or in un
electrified rural areas, Solar thermal power plants and local
distribution network, would be provided capital subsidy of 60% AND
soft loan at 5%. These could be in either stand alone or co / poly
generation mode.
Annexure to Drawal Application for Refinance under Solar Off-grid (PV and Thermal) and decentralised applications under ARF
(To be submitted in Duplicate )
Name of Off-grid Physical Total Bank Loan Bank loan Bank loan Refinance Of Column 4 For NABARD's
the pre- Units Cost - sanctioned released outstanding Claimed use
District approved Actuals (Net of
& Code Model No. or as Capital
per the subsidy)
ceiling
No. of SC/ST/OBC Borrowers No. of No. of Refinance
women Minority recommended
borrowers Community
SC ST OBC Total borrowers
1 3 4 5 6 7 8 9 10 11 12 13 14 17
1
2
3
4
5
6
7
8
9
10
11
Solar
Water
Heating
System
Date :
Place :
Bank's seal
Checked by
Solar Statement Proforma 11.10.2010.123