The electricity tariff in Karnataka has gone up by ₹2.89/unit! This will be one of the biggest hikes introduced by the state government.

But, Instead of worrying about the ever-increasing energy bills, why not take this opportunity to switch to solar power? It can help you up to 80% of your monthly electricity expenses and reduce your carbon footprint.

Let’s explore the state’s solar energy portfolio and renewable energy policies, starting with the available solar subsidies.

In 2022, the union ministry launched a uniform Central Financial Assistance (CFA) scheme. MNRE also raised this incentive recently under the new PM Surya Ghar Muft Bijli Yojana.

The Karnataka government does not provide a separate subsidy, but residential consumers installing grid-connected rooftop solar systems can avail CFA through the national portal for rooftop solar. The details are the subsidy are as follows:

In addition, Group Housing Societies (GHS) and Resident Welfare Associations (RWA) are eligible for a subsidy of Rs. 18,000 per kW for common facilities, such as EV charging, up to a total capacity of 500 kW (at 3 kW per house).

Karnataka RE Policy 2022-27

The development of renewable energy capacity is one of the prime priorities for the Karnataka government. And the ambitious RE policy launched by the state is a testament to that commitment.

In March 2022, the state government approved the Karnataka Renewable Energy Policy form 2022-27. For solar energy, the policy states a target of achieving 1000MW of grid-connected rooftop solar projects by 2027.

The other key targets specified by the policy are:
• Increase grid-connected rooftop solar installations over public and private buildings
• Raise floating solar installations over existing dams and reservoirs
• Set up ground-mounted and rooftop PV plant for EV charging
• Develop the ecosystem for distributed solar by solarizing agricultural pumps and feeders.
• Promote wind-solar hybrid installations

To achieve these goals, the state government has taken the following measures under the new policy:

• Allow RE developers to sell the generated energy within and outside the state (while adhering to the electricity guidelines)
• Make the process of procuring land for RE projects easier
• Promote rooftop installation over residential, commercial, and industrial buildings through net metering and gross metering.
• Promote peer-to-peer trading between grid-connected parties.
• Allocate water bodies on a long-term lease/rental basis for floating solar projects.
• Additionally, the state cabinet will help 10,000 farmers build solar power systems through PM KUSUM Yojana category-B.

In recent years, many businesses have started investing in Karnataka’s solar segment. Recently e-commence giant Amazon announced plans to build a wind-solar hybrid project in the state. Moreover, Tata Power Renewable Energy will invest over ₹3000 crores to develop solar projects.

Like these two, many organizations have either invested in Karnataka’s RE industry or have announced plans to do so. The reason why the state is attracting investors in the clean energy segment is because of its favorable policies.

For example, to encourage clean energy development, the state offers incentives such as an investment promotion subsidy, up to 100% exemption on stamp duty, and 100% exemption on electricity duty for 8 years.

For larger enterprises investing in clean energy, Karnataka provides Up to 2.25% of turnover as an investment promotion subsidy for 6-10 years and Up to 100% reimbursement on land conversion fees.

The government also provides some financial benefits to consumers with an installed solar capacity of 1MW. These include, 40% accelerated depreciation on the system and 10 year Tax holiday on solar projects.

Moreover, the state has been increasingly promoting open-access systems. Based on a recent report, Karnataka had the highest open-access capacity solar installations in the first half of 2022. The government also gives preference to green open-access projects over traditional open-access projects.

Karnataka has immense solar potential, estimated at over 25 GW. The state enjoys an average of 240-300 sunny days per year, with solar radiation levels of 5.4 to 6.4 kWh/m²/day. As of September 30, 2024, Karnataka has a total installed solar capacity of 8.9 GW, making it the third-leading solar-powered state in India.

The Pavagada Solar Park (or Shakti Sthala) in the Tumakuru district of Karnataka is India’s second-biggest solar power plant, having previously been the world’s largest of its kind, with a production capacity of 2,050MW.

In September 2023, the Karnataka Energy Department also announced plans to expand the capacity of the solar park by 3 GW. The state government aims to make the solar park the largest in Asia again.

The state government is also developing three additional ultra-mega solar power projects, each with a capacity of 2,500 MW, in the Bidar, Koppal, and Gadag districts. Moreover, Karnataka has set an ambitious goal to add 19.2 GW of renewable energy by 2030, underscoring its commitment to a sustainable energy future.

These developments highlight the bright future of renewable energy in Karnataka.

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