In September 2009 a broad feed-in tariff calculation formula was introduced by the Central Electricity Regulatory Commission (CERC), which varies by technology, resource intensity and return on equity. The tariff incorporates small projects and projects that can‘t benefit from the government’s accelerated depreciation programme. Developers can apply for this incentive up to the end of March 2012.
In December 2009, the Ministry of Power also approved a Generation Based Incentive (GBI) subsidy of INR 0.5 per unit of electricity fed into the grid with a cap of USD 33,000 per MW per year for a minimum of four years and a maximum of 10 years.
Eligible projects include those commissioned after 17 December 2009. The scheme is limited to the first 4,000 MW of eligible capacity that is grid connected by March 2012. As of January 2011, only 394 MW of wind capacity was registered with the GBI from independent power producers, with thermal power projects keen to use wind power to meet their mandates for carbon emission reductions. Thus, a review of the GBI is anticipated.
A total of INR 3.8 billion (USD 84.4 million) was earmarked for the scheme in December 2009.
Wind power projects selling to third parties or merchant power plants are excluded under the scheme.
In January 2010, India’s Central Electricity Regulatory Commission announced rules for trading with renewable energy certificates (RECs). These certificates can be bought by companies to meet their renewable energy requirements according to state renewable portfolio standards. There are plans for a national agency to administer the certificates trading. Eligible projects have a minimum capacity of 250 kW and are commissioned after March 2010. They are not allowed to receive feed-in tariffs. Non-solar RECs must trade within the price band of INR 1.5 to 3.9 per kWh (USD 0.033 to 0.087 per kWh). Thus, there is more of an incentive for developers to opt for the feed-in tariff in Haryana state if the projects are eligible, as the feed-in tariff is above INR 3.9 per kWh.
The government introduced an INR 50 tax on every tonne of coal produced or imported into India, with money raised being used for a new Clean Energy Fund.
Also in 2010, the MNRE announced an intention to leverage INR 25 billion (USD 500 million) from the Clean Energy Fund to establish a Green Bank, working with IREDA.