Committee recommends a capital subsidy scheme to make solar projects more financially feasible and attract investment in Punjab

A government-appointed panel in Punjab has put forward a series of recommendations aimed at expanding the state’s renewable energy sector. The Renewable Energy Sector Committee has recommended a dedicated land allocation policy for solar parks.

At present, industrialists from Punjab invest in solar projects in states such as Madhya Pradesh and Gujarat, where power costs around Rs 3 per unit, only to buy it back in Punjab at Rs 9-10 per unit. The panel suggested that open access and flexible land leasing models could make the state more attractive for renewable energy investment.

On financing, the panel called for a capital subsidy scheme. Setting up 1 MW of solar capacity requires an investment of Rs 4-7 crore, and tapping into Punjab’s estimated 5-6 GW potential would require Rs 20,000-35,000 crore. The committee emphasised that financial support is crucial to unlock this potential.

Boosting Local Solar Manufacturing
The panel also advocated for promotion of local solar manufacturing, citing that most panels and inverters are currently sourced from outside Punjab. Establishing a domestic manufacturing cluster could strengthen supply chains and generate employment.

Regulatory reforms were another key recommendation. The committee proposed increasing rooftop solar capacity for industrial units from the current 63 per cent of sanctioned load to 90 per cent and facilitating seamless transfer of security deposits when units change ownership, making the investment environment more investor friendly.

Beyond solar energy, the committee highlighted Punjab’s extensive canal network as a potential resource for small hydro projects. Canal-based hydro plants of 1-5 MW could provide low-cost clean energy while generating rural employment.