SECI is a Section-8 company under the Companies Act, which provides for formation of companies with charitable, objects. Under this provision, the commercial aspect of a business entity and its growth is completely prohibited.
The decision will enable SECI to own solar power plants for generating and selling electricity and take up other commercial activities like manufacturing of solar products and materials.
"The Union Cabinet today gave its approval to the SECI to apply to the Registrar of Companies for converting it into a Section 3 company under the Companies Act, 2013, and renaming it as the Renewable Energy Corporation of India (RECI)," an official release said.
Apart from solar power, the proposed RECI will take up development of all segments of renewable energy namely geo-thermal, off-shore wind, tidal etc.
The government has also decided to enlarge the scope of the activities of SECI to cover all renewable energy sources, with a view to provide a comprehensive and optimised solution for generation of renewable energy integrating various sources.
The generation profile of solar, wind and small hydro have complementarity and generating power from these sources are likely to be more uniform. This will also reduce stress on transmission and distribution networks, resulting in better grid management, the statement said.
SECI has initiated various activities for setting up of solar power plants as also for the promotion and commercialisation of solar energy technologies, with long term perspective of assuming the role of a solar power developer.
For the first time, SECI made a profit of about 12 crore during the last financial year and has become a networth positive PSU. It is also expected to make a profit of around Rs 300 crore this year.