In 2016, Uttar Pradesh adopted a Mini-Grid Policy in order to speed up electrification process in rural areas of the province through a facilitation of renewable energy and mini-grids deployment.
The mini-grids supported and regulated by the policy are to be installed in un-electrified areas (mostly rural) with no access to the national grid or in areas with low levels of electricity supply. The maximum size of the mini-grid project is 500 kW.
The policy allows mini-grid developers to operate under two models.
Under the first model the mini-grid developer is entitled to a 30% of a capital grant support in exchange for a state government/distribution company to indicate a location of the project, customer tariff and technical specifications of the project.
- Developers are obliged to deliver 8 hours of electricity supply for residential units and 6 hours for commercial and other production needs. The oversupply of the electricity can be sold to a customer chosen by a project owner.
- The electricity tariff is set and the developer will charge Rs. 60/month for load of 50 Watts, Rs. 120/month for 100 Watt t for 8 hours of daily electricity supply and for the load more than 100 Watt tariff will be on mutual consent between consumers and developer.
- The project developer must align project technical specifications according to Central Electricity Authority and UPPCL and Electrical safety & Security standards.
Under the second model the project developer is free to choose a project location along with a level of a tariff charged to the customer however is not entitled for a capital grant support. However, projects operating under this model are entitled for the benefits of other Infrastructural 5 related support, incentives provided in Industrial Policy and exit process in case of conventional grid access.
Mini-grid projects must be executed within certain timeframes:
- Projects based on solar PV panels must be completed within 6 months;
- Biomass/biogas based projects must be completed within 9 months;
- Wind and small energy power projects must be completed within one year.
Six months extension may be granted for a delay due to actual/natural reasons at various levels.