Policy status:In Force
Date Effective:2003
Policy Type:Economic Instruments>Fiscal/financial incentives>Tax relief, Economic Instruments>Fiscal/financial incentives>Loans
Policy Target:Hydropower, Multiple RE Sources, Solar, Wind, Bioenergy
Policy Sector:Electricity, Framework Policy, Multi-sectoral Policy
Size of Plant Targeted:Small
Agency:Indian Renewable Energy Development Agency Ltd

The federal Indian government initially sought to support increased power generation from wind turbines in the 7th National Five Year Plan (1985 to 1990). The Ministry of New and Renewable Energy (MNRE) has since developed a range of policy measures and fiscal incentives to encourage the development of wind farms and make them commercially viable.  

These policy initiatives include:

  • These schemes were aided by the passing of the federal Electricity Act in 2003, which paved the way for setting up State Electricity Regulatory Commissions (SERCs), which has fostered an atmosphere conducive to the rapid development of power generation throughout the country.
  • The central government and a number of state governments and union territories have extended fiscal and financial concessions to the wind energy sector.
  • Presently, wind farm projects qualify for accelerated depreciation under the Income Tax Act and also a tax holiday as infrastructure projects.
  • Additionally, the Indian Renewable Energy Development Agency Ltd (IREDA), incorporated as a public limited government company under the control of MNRE, provides preferential loans for wind turbine installation and development.

The central government and a number of state governments and union territories have extended fiscal and financial incenctives for the development of smaller scale wind, solar, and bioenergy projects. MNRE also provides incentives to carry out detailed survey and investigation and preparation of detailed project reports. Presently these projects also qualify for a tax holiday as infrastructure projects.

The initiatives undertaken by IREDA and MNRE include the following goals with matched baselines for each form of renewable energy:

  • the impact of fiscal and financial incentives i.e. tax benefits, capital subsidy, depreciation of benefits not substantial to mechanism improvement
  • impact of RECs makes projects more viable
  • financial viability is highly sensitive to preferential tariff and success/failure of the project is highly dependent on it
  • Benefits under SDF schemes have reduced 10% fo project costs

However, for a deeper overview please see the URL source. Each province/state of India has staggered renewable energy policies dating back from as early as 2002 to the present. These provinces include:

  • Andaman and Nicobar Island
  • Andhra Pradesh
  • Bihar
  • Chhattisgarh
  • Gujurat
  • Haryana
  • Jharkhand 
  • Jammu and Kashmir
    • Projects set up in North Eastern States and Sikkim, Uttaranchal, Jharkhand, Chhattisgarh, Islands, estuaries and Jammu & Kashmir are eligible for certain concessions.


Last modified: Wed, 31 May 2017 16:06:06 CEST