Rajasthan’s RIPS 2024 Offers Major Incentives for Clean Energy Growth
Rajasthan unveils the Rajasthan Investment Promotion Scheme 2024, offering significant incentives for renewable energy investments, including exemptions on duties, fees, and transmission charges, aiming to attract large-scale investments and support India's 500 GW renewable energy target by 2030.
October 23, 2024. By EI News Network
This initiative seeks to attract substantial investments, foster balanced economic development, and create numerous job opportunities across the State. It may be noted that for the first time, the policy also provides incentives to existing businesses that make investments aligned with the State's priorities of 'Green Growth' and 'Export Promotion'.
The State has an impressive average of 300 to 325 sunny days per year, making it ideal for capturing solar energy efficiently. A key component of RIPS 2024 is its focus on promoting renewable energy. The scheme offers a range of incentives to encourage investments in solar, wind, hybrid power, energy storage systems, and Green Hydrogen production, establishing Rajasthan as a significant player in the renewable energy sector.
Under RIPS 2024, companies investing in renewable energy projects will enjoy substantial benefits, including exemptions on electricity duties, stamp duties, and market fees for up to seven years. Renewable energy enterprises establishing new generation units will receive a 100 percent exemption from electricity duties for seven years, a 75 percent exemption on stamp duties, full reimbursement of market fees, and exemptions from Pollution Control Board fees for both establishment and operation. Additionally, they will benefit from a 100 percent subsidy on Cross Subsidy Surcharge (CSS) and Additional Surcharge (AS) for renewable energy used in Green Hydrogen production.
The scheme also outlines specific incentives for energy storage systems. Projects integrating battery energy storage systems (BESS) with capacities of 5 percent of the renewable plant’s capacity will receive a 75 percent exemption on transmission and wheeling charges, with further benefits for higher storage levels, reaching a full exemption at 30 percent capacity. Standalone battery storage systems will enjoy a full exemption from these charges for seven years, while BESS connected to grid substations at 11 kV or 33 kV will receive similar benefits. For renewable energy plants supplying power to Green Hydrogen facilities, 50 percent of the transmitted energy will be exempt from transmission and wheeling charges for seven years.
Enterprises investing in captive renewable power plants can include 51 percent of their investment in their Eligible Fixed Capital Investment (EFCI), qualifying them for asset creation incentives. Group captive power agreements of 12 years or more allow for 100 percent of investment to be included in EFCI, further enhancing capital subsidies for large-scale projects.
In addition to these incentives, the scheme encourages sustainable practices. Eligible enterprises can access benefits up to a maximum of INR 12.5 crores, which include a 50 percent reimbursement of environmental project costs, a 100 percent exemption from electricity duty for captive renewable energy generation for seven years, and a 50 percent waiver on consent fees under the Rajasthan Green Rating System. Enterprises that have already invested at least INR 50 crores in Rajasthan are also eligible for a 10 percent subsidy on machinery utilizing clean production technology.
Micro, Small, and Medium Enterprises (MSMEs) are specifically catered to within RIPS 2024, with incentives capped at INR 1 crore. MSMEs can benefit from a 50 percent reimbursement on environmental project costs, a 10 percent subsidy on clean production technology, and a 100 percent exemption from electricity duty for captive renewable energy generation for seven years.
The scheme additionally introduces benefits for power-intensive sectors, allowing manufacturing enterprises to receive a 5 percent reimbursement on State tax or a 5 percent-point VAT reimbursement on Piped Natural Gas (PNG) over seven years.
Through RIPS 2024, Rajasthan aims to solidify its status as a premier destination for renewable energy generation, leveraging its advantageous geographic conditions to attract investments across various categories, including solar, wind, hybrid projects, pumped hydro storage, battery energy storage systems, biomass, and waste-to-energy projects. This policy reflects the State's commitment to fostering a robust renewable energy sector and significantly contributes to India’s broader renewable energy goals.
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