In its quest to encourage solar energy projects, the State government is allowing conversion of agriculture land for non-agriculture purpose, in violation of certain basic laws.

The total installed capacity will be 300 MW and each MW is expected to yield 16 million units. The project, however, has not been given any name.

The Karnataka Renewable Energy Development Limited (KREDL) on October 9 received online applications from farmers who were interested in setting up solar plants. The process lasted for seven minutes and it was closed after receiving 295 applications.Each applicant can put up a plant with a capacity of 1 to 3 MW but should possess a minimum of five acres of agriculture land, unsuitable for cultivation.

No subsidy

The government is offering no subsidy for investors. The tariff for each unit of energy is as high as Rs 8.40 as solar projects are highly cost intensive. On an average, the cost of purchasing a unit of power is Rs 3.40, according to the Karnataka Electricity Regulatory Commission (KERC). 

Official sources said that for putting up 300 MW capacity plants, for which the applications have been received, not less than 1,500 acres would be required. Once farmers throw open their agriculture land for non-agriculture purpose, they would remain so even if the power plant is a failure or for some reason the developer walks out of the project. 

The Karnataka Solar Policy 2014-21 has stated that developers will be allowed to start the project execution without waiting for formal approval for conversion of agriculture land to set up a solar plant. The deemed conversion is allowed by amending the Section 95 of the Karnataka Land Reforms Act.

The KERC, it is learnt, has found fault with the KREDL for the manner in which the applications were received on October 9. Energy generation is de-licensed as per the Karnataka Energy Act, 2003. Hence, there was no need for any government agency to invite applications. Only an agreement for power purchase would be required between the seller and buyer. 

The KREDL has given room for doubts whether the selection of applicants would be a transparent one, sources said. In addition to this, the selection would be on a first come first-served basis.

However, solar energy mapping has already been done across the country. Solar energy can be tapped provided there is reliable solar radiation. The Solar Energy Centre of Union Ministry of New and Renewable Energy had already mapped the solar energy routes. 

Any decision to allow solar plants should also be backed by scientific rationale. When such is the rule, the government can’t instal solar plants for the sake of investment, sources in the KERC said. 

Sources in the KREDL said that it received 10,000 applications seeking permission to invest in the solar energy sector. The energy cost is very high as compared to thermal and hydro. If the government allows more solar power production, then the purchase cost would be a burden on the Escoms (Electricity Supply Companies).

The KREDL, as of now, has no plans to invite applications again from farmers seeking investment in the solar plants. Many big-time industrialists and film personalities are investing in solar and wind energy projects in the State because they can claim the accelerated depreciation benefits.

For a solar plant, an investor can claim 80 pc depreciation in the first year itself leading to saving of income tax. In a way solar projects have turned into a tax-saving scheme, sources said.