Parveen Arora and Suruchi Kotoky
BTG Legal was commissioned by Indo-German Energy Forum Support Office (IGEF-SO) [c/o Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmBH] to write a legal assessmetn of Agriphotovoltaics (AgriPV) in the Indian states of Maharashtra and Karnataka. The commissioning was on behalf of the Ministry of New and Renewable Energy (MNRE), Government of India, and the Federal Ministry for Economic Affairs and Climate Action (BMWK), Government of Germany.
The legal assessment was published in a consolidated report, that assesses the current legal framework in selected states of India in the context of 1-10 MW agriphotovoltaic projects. The major focus lies on land regulations and how they influence the status of land-use category, probable change in tax incidence for farmers and developers, finance availability for project development and permit requirement.
Queries covered in the assessment
Query No. 1: List the legal requirements of permits/ licenses to establish a multi MW (1 to 10 MW) size solar project in Maharashtra and Karnataka on agricultural land
Query No. 2: List the barriers for an AgriPV project to be installed on agricultural land for additional large-scale solar generation, co-located with agriculture. Analyse the possibility for a new, commercial or hybrid category for an AgriPV project, so that power generated from it may either be used by farmer himself or sold through government utility, through Power Purchase Agreement.
Query No. 3: List potential practices or avenues to obtain a construction permit on agricultural land under present legal framework and authorities to be contacted. The possible avenues/offices of redressal for obtaining permit/ permission for an AgriPV project in each state.
Query No. 4: Does legislation in place permit farmers to take credit against agricultural land as collateral? If yes, is it actually happening? Any barriers that the farmers face? Are banks able to seize the collateral in case of default?
Query No. 5: Financial implications for the solar project developer / owner as well as for the farmer. Please also highlight any tax implication on farmer/developer for establishing AgriPV power plant on the land of farmer. Whether developer and/or farmer may continue to have access to bank loans for their respective businesses i.e. AgriPV solar farms and agriculture respectively. Whether benefits/subsidies/minimum support price for farming may continue, even if agricultural land is also used for AgriPV power plant?
Query No. 6: Research any legal basis or legal aspects for states to consider the introduction of a new type of land category recognizing AgriPV (apart from KUSUM component A) - any experience in the state assuring construction permit for AgriPV projects as well as all benefits associated with farming on agricultural land).
Query No. 7: Recommendations to accelerate construction permits for AgriPV projects in each state on agricultural land.
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