Solar power players miffed with Haryana's policy hurdles, high land costs

The state had made lofty claims of setting 2,000 Mw projects at an estimated investment of Rs 80 billion; not even one has seen the light of day

A challenging regulatory environment and stuck clearances have made life for solar power project developers difficult in BJP-ruled Haryana. The state had made lofty claims of setting up projects totalling 2,000 Mw at an estimated investment of Rs 80 billion, but none have seen the light of day. Project developers claim slow land clearances, high cost of farmland, transmission niggles and lack of conducive policies for power sales have led to stagnant growth of the sector in the state.

As per an October 2018 amendment in its 2016 policy, Haryana permitted sale of power outside the state, waived transmission charges and surcharges, and allowed third-party sale to industries, among other things. This proposition is for new projects and not for the older ones. Solar developers have been pleading with the state government to extend the benefit to all expeditiously. They claim that several applications for getting waivers and approval are lying pending with the state, as the policy is yet to get the CM's nod. This has landed close to 70 project developers in a soup.

The guidelines mandated that the project developers need to get land and financial closure in place before applying for necessary approval and waivers from the state. “The delay in finalising the guidelines and process, which are stuck at the CM's level, has put investors and developers in serious trouble. They made their investments based on Haryana's policies and the invitation extended by its government to boost renewable energy in the state,” said a project developer.

The government is unable to procure land in many cases, and at times the land procured by a private player for solar project is stuck. “In some districts, a farmer earns on an average Rs 5,000-10,000 per acre per year for lack of water and is not able to optimize his holding for agricultural use. But if he were to provide the land on lease to solar developers, he could earn approximately Rs 35,000-45,000 an acre on average for 30 years,” said a project developer operating in the state.

The developers have, through several representations, sought clarity from the state government. A group of project developers in their statement said the state's power department is not providing transmission connectivity approvals and waivers as provided in the policy. “As a pre-requisite of the guidelines released the applicants were to invest in land and infrastructure, and attain financial closures before getting the final sanction, which made these companies to invest thousands of crores at the initial stage itself,” said an executive.

The CM's office held a meeting this week hearing their grievances. The participants, however, said no headway was made. A report by Mercom India says Haryana only has 60 Mw of installed solar capacity.