Jawaharlal Nehru National Solar Mission

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Officially launched in November 2009, Jawaharlal Nehru National Solar Mission (JNNSM) is one of the eight National Missions laid out in India’s National Action Plan on Climate Change (NAPCC). It aims to incentivize the installation of 22,000 MW of on- and off-grid solar power using both Photovoltaic (PV) Concentrated Solar Power (CSP) technologies by 2022, as well as a large number of other solar applications such as solar lighting, heating, and water pumps. As the power trading arm of the National Thermal Power Corporation (NTPC), NTPC Vidyut Vyapar Nigam Ltd (NVVN) has been designated as the nodal agency to ensure the execution of Phase 1 of the mission. The Solar Mission will be implemented in three stages, with specific targets defined for the respective segments (see table under "Programme Targets").

Programme Targets

Application segment Target for Phase 1 (2010-13) Target for Phase 2 (2013-17) Target for Phase 3 (2017-22)
Solar collectors 7 million m2 15 million m2 20 million m2
Off grid solar applications 200 MW 1,000 MW 2,000 MW
Utility grid power, including roof top 1,000 - 2,000 MW 4,000 - 10,000 MW 20,000 MW

Programme Phases

Three phases are identified under JNNSM. Grid-connected solar projects that signed PPAs prior to November 19, 2009, were eligible to migrate to JNNSM under certain conditions until February 29, 2010.170 At the end of each phase there will be a thorough reevaluation of the process.

Phase 1

2010 - 2013:

The focus during Phase 1 is to experiment with incentive structures and to create a market for solar power in India by bringing in investors, engineer-procure-construct (EPC) contractors, and equipment manufacturers. Both on- and off-grid projects will be promoted during this phase with the expectation that 500 MW of grid-connected and 200 MW of off-grid solar PV will be installed.

The allocation of 500 MW of grid-connected PV projects will be decided in two batches. The first will be in financial year 2010–2011 and the second in financial year 2011–2012. The first batch will allocate 150 MW. Under migration guidelines, projects migrating from older incentive schemes to newer ones should be selected prior to new projects. If applications exceed 150 MW, projects will be chosen based on the discount offered by project developers on the CERC tariff. Under the second batch, additional projects will be selected up to 350 MW of remaining capacity. Projects will feed into the grid at 33 kV or above. Individual projects will have a capacity maximum of 5 MW (± 5%), and each company can only apply for one PV project under Phase 1 (but can also apply for one CSP project).

Applying for a project under Phase 1 of JNNSM requires a company to have an audited net worth of at least INR 30 million (USD 600,000) per MW of a project's installed capacity or INR 150 million (USD 3 million) for a 5 MW project in at least one of the last four financial years. A company must provide a “Bid Bond,” or third-party guarantee, per megawatt for any discount on the offered tariff. The higher the discount, the higher the amount of the bond, ranging between INR 10,000 (USD 200) and INR 50,000 (USD 1,000) per MW on a graded scale. Furthermore, the company must provide an earnest money deposit (EMD) in the form of a bank guarantee of INR 2 million (USD 40,000) per MW along with the initial request for selection and, later, a performance bank guarantee of INR 3 million (USD 60,000) per MW at the time of signing the PPA. A project shall achieve financial closure within 180 days before the signing and must be commissioned within 12 months after the signing of the PPA. To ensure PV module quality, modules proposed for the project must qualify to the latest edition of the following International Electrotechnical Commission (IEC) PV module qualification test or equivalent from the Bureau of Indian Standards: for crystalline silicon solar cell modules—IEC 61215; for thin-film modules—IEC 61646; and for concentrator PV modules—IEC 62108. For the first batch of Phase 1, it will be mandatory for projects using crystalline silicon technology to use modules manufactured in India.

Phase 2

2013 – 2017:

During Phase 2, the goal is to build on the experience of Phase 1 to facilitate a substantial increase in capacity additions, significantly bring down the cost per kilowatt-hour, and achieve additional installations of 3,000–10,000 MW of combined PV and CSP capacity. JNNSM identifies the need for international support in the form of technology transfer and financial assistance in order to meet the higher goal. The central government will work to create a favorable environment for solar manufacturing, particularly for solar thermal technology manufacturing. By 2017, the goal is for the installation of 15 million m2 of solar thermal collector area and for off-grid solar capacity to reach 1,000 MW. For Phase 2, it will be mandatory to use cells and modules manufactured in India.

Phase 3

2017 – 2022

Solar power is expected to achieve grid parity by 2022 through the final goals of the JNNSM: off-grid solar capacity installations will reach 2,000 MW, on-grid capacity will reach 20,000 MW, 20 million m2 of solar thermal collector area will be installed, and 20 million solar lighting systems will be deployed in rural households.

Support Mechanisms

On-grid PV

JNNSM aims to address the shortcomings of prior schemes through revised and more attractive feed-in tariffs, a single-window application process, and RPOs that include a solar purchase obligation. In February 2010, CERC announced a feed-in tariff for financial year 2010–2011 of INR 17.9 (USD 0.36) per kWh for PV and INR 15.3 (USD 0.31) per kWh for CSP and declared that would have a validity of 25 years. It is assumed that at current cost levels, the tariff will allow investors to achieve an internal rate of return of about 16–17% after taxes. CERC will revise the tariff every year. Ideally, by 2022, installation costs will come down significantly to enable solar power to achieve grid parity so that it becomes a viable source for India’s energy needs in the absence of government incentives. Assuming a continuing decrease in PV costs over the span of JNNSM, even as the preferential feed-in tariff is reduced in subsequent years, the share of solar power in the energy mix should continue to increase. Under JNNSM, the NVVN is required to purchase the expensive solar power from developers and bundle it with an equivalent amount of its much cheaper coal-based power before selling the mixed power to the various utilities at a marketable price.

Off-grid PV

Under the guidelines for off-grid and decentralised solar application in the Mission, the focus is on decentralised systems meet the target of Phase 1 (until 2013). Along with its main objective of installation of 1000 MW solar grid connected systems, a modest 200 MW has been kept for off-grid and decentralised systems. A budget allocation of Rs. 227 Crore has been made for the financial year 2010-11 (for phase 1) mainly for rural areas.
Under Phase 1 of the programme, mini-grids for rural electrification up to a maximum capacity of 250 kw per site, are supported. MNRE will provide financial support through a combination of 30 % subsidy and/or 5% interest bearing loans. Capital subsidy of 90% of the benchmark cost would be made available for special category states, viz. North East, Sikkim, J&K, Himachal Pradesh and Uttarakhand. In addition, the scheme also supports setting up stand alone rural solar power plants/ packs (both PV and thermal) in remote and difficult areas such as Lakshadweep, Andaman & Nicobar Islands, and districts on India’s international borders.

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