Solar in Andhra Pradesh: Potential, Solar Policy and Subsidy (2024)

Andhra Pradesh houses two of the largest solar power plants in India, which have a cumulative capacity of 4530 MW. It is also home to one of the biggest floating solar projects in the country!

By these metrics, It’s is easy to visualize the kind of potential Andhra Pradesh has when it comes to solar energy. Moreover, the state government is trying its best to harness this potential by implementing various policy initiatives.

In this blog, we will explore the state’s solar portfolio and policy, along with the opportunities it presents for solar businesses.

The Andhra Pradesh government does not provide a separate subsidy, but residential consumers installing grid-connected rooftop solar systems can avail central financial assistance directly from the national portal for rooftop solar itself. The details are the subsidy are as follows:

• From 1kW to 2kW capacity: ₹30,000/ kW
• For 3kW capacity: ₹30,000/ kW till 2kW and an additional ₹18,000.
• For systems over 3kW capacity: ₹78,000 (fixed)

In 2018, Andhra Pradesh launched its solar policy with the following objectives:

• Aim for a minimum total solar power capacity addition of 5,000 MW in the next five years to meet the state’s growing power demand in an environmentally sustainable manner.
• To create solar parks with the appropriate utility infrastructure to entice developers to build solar power projects in the state.
• To promote the dispersed generation, which can help to reduce losses by eliminating upstream network costs.
• Deploy solar-powered agricultural pump sets to meet farmers’ electricity needs during the day.
• To encourage the development of local manufacturing facilities that will create jobs in the state.

Solar energy has the potential to become a significant source of power for the state as its needs expand. Agriculture consumes a significant amount of energy in AP, accounting for about 24% of the state’s overall energy usage.

Solar energy can also be used to help shift the agricultural load and satisfy electricity demand during the day. The state administration is eager to harness the enormous solar potential and promote this clean source of energy to fulfill the state’s growing energy demands. Andhra Pradesh is an attractive location for solar power projects because of the following factors:

• Approximately 300 bright days per year with solar insolation of more than 5 kWh/m2/day are available.
• Among India’s best-performing electricity distribution firms (APEPDCL and APSPDCL).
• A reliable and efficient evacuation system that allows for distributed generation.

To promote rooftop solar installations, the policy introduced loans up to ₹10 lakhs for solar installations. To promote industrial solar installations, initiatives such as 40% Accelerated Depreciation, 10 year Tax holiday on solar projects, and Loans available for up to Rs.15 Crore for renewable energy projects were introduced.

Andhra Pradesh plans to add about 16103 MW of clean energy capacity by end of 2023 & 27,921 MW by the year 2029.

The key commercials of Andhra Pradesh are agriculture, automobiles and auto components industry, mines and minerals, textiles and apparel, IT industry, Bulk drugs, and pharmaceuticals, horticulture, and poultry farming.

Let’s analyze the state from the point of view of solar developers. The complete state is divided into three segments:

The energy consumption of this segment is lesser than the other two segments. Up to 30kW solar solution is enough for Residential & Agricultural consumers.

The energy consumption of this segment is more than Residential & Agricultural and can reach up to 2 MW. Thus, 100kW system is often enough for this segment.

The energy consumption of these industries is very big, so these industries need 500kW capacity system & more capacity of solar solutions.

The state has built a renewable energy capacity of 9.3 GW, out of which solar energy accounts for 4.5 GW. Moreover, state officials have claimed that Andhra has a solar potential of over 33 GW.

Kurnool Ultra Mega Solar Park, Andhra Pradesh

Andhra Pradesh has 5 massive utility-scale solar plants with a total capacity of 4160 MW. Out of these, Kurnool Ultra Mega Solar Park( 1000 MW) and NP Kunta Ultra Mega Solar Park (978.5 MW) are among India’s largest solar power plants.

The world’s largest Integrated Renewable Energy Storage Project (IRESP) is also being built in Andhra Pradesh. The project will have a total capacity of 5230 MW, out of which 3000 MW would be sourced through solar energy.

In 2022, the AP government commissioned a 3 MW floating solar project on the Meghadri Gedda Reservoir in the city of Vishakhapatnam. Moreover, in January this year, the AP government announced plans to procure 7000 MW of solar energy from SECI from 2024.

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