Targets, incentives, eligibility and implementation

POLICY AT A GLANCE

The policy covers utility-scale plants, solar parks, rooftop systems, agricultural feeder solarisation, solar pumps, floating and canal-top projects, installations along transport corridors, energy storage and solar-equipment manufacturing.

What is the Uttar Pradesh Solar Energy Policy?

The policy is the state government’s framework for expanding electricity generation from solar energy and developing the infrastructure needed to connect, store and use that electricity.

Its coverage includes:

• Utility-scale solar-power projects;
• Solar parks;
• Residential rooftop systems;
• Rooftop installations on government and educational buildings;
• Solar systems for industrial and commercial consumers;
• Solarisation of agricultural feeders and grid-connected pumps;
• Floating, reservoir-top and canal-top projects;
• Solar installations along expressways, roads and railway tracks;
• Battery and pumped-storage systems;
• Off-grid applications such as solar pumps, lighting and water heaters;
• Solar-panel and equipment manufacturing.

The policy does not prescribe one universal subsidy for every solar installation. Eligibility and support depend on the project category, capacity, ownership structure, power-purchase arrangement and whether the electricity is sold to a distribution company, supplied to another consumer or used captively.

Why was the policy introduced?

Solar projects also require supporting measures that go beyond the installation of panels. These include land availability, transmission infrastructure, grid connectivity, electricity regulation, metering, energy banking and mechanisms for purchasing the electricity produced.

The policy therefore combines capacity targets with provisions for solar parks, rooftop projects, agricultural applications, transmission support and storage. It also seeks to develop skills and promote manufacturing connected with the solar-energy sector.

What are the main targets?

The policy aims to establish 22,000 megawatts of solar-power capacity by FY27.

A person installing a small rooftop system has a different application and benefit structure from a developer establishing a utility-scale plant. Similarly, a project selling electricity to the Uttar Pradesh Power Corporation Limited is treated differently from one using power captively or selling it to a third party.

What support is available for residential rooftop solar?

The policy provides a state subsidy of Rs 15,000 per kilowatt, capped at Rs 30,000 per consumer, for eligible grid-connected residential rooftop systems.

This assistance is intended to supplement financial support available from the Union government. It is provided after successful installation, commissioning, net-meter connection and submission of the required documents.

The maximum state subsidy is therefore reached at a system size of 2 kilowatts. A larger rooftop system does not automatically receive more than Rs 30,000 under this particular state provision.

Eligibility also depends on:

• A valid residential electricity connection;
• Technical feasibility at the distribution-transformer level;
• Installation by an eligible vendor;
• Compliance with metering requirements;
• Inspection and commissioning;
• Submission of the subsidy claim.

The policy provides for net metering for residential consumers under regulations issued by the Uttar Pradesh Electricity Regulatory Commission. Current metering conditions and technical limits must be checked against the regulations and distribution-company procedures in force when the application is submitted.

What support applies to non-residential rooftop projects?

Government buildings, educational institutions, hospitals, hostels, research facilities and other eligible institutions may establish rooftop solar systems for captive consumption.

The policy encourages the Renewable Energy Service Company model, under which a third-party developer invests in the plant and sells the generated electricity to the host institution under a power-purchase agreement.

Uttar Pradesh New and Renewable Energy Development Agency may aggregate demand, prepare standard contracts, conduct competitive bidding and assist institutions in selecting service providers. The policy states that institutions using its consultancy support may be charged 3 per cent of the plant cost, along with applicable taxes.

Industrial and commercial consumers are generally governed through net billing or another mechanism prescribed by the electricity regulator rather than the same residential net-metering arrangement.

What incentives are available to utility-scale projects?

Stamp-duty exemption

The policy provides 100 per cent exemption from chargeable stamp duty on land purchased or leased for an eligible solar-power project or solar park anywhere in Uttar Pradesh.

The exemption should not be assumed merely because land is intended for a future solar project. The project, transaction and documents must satisfy the applicable government order, registration conditions and eligibility procedure.

Electricity-duty exemption

Solar projects established within Uttar Pradesh may receive 100 per cent exemption from electricity duty for ten years where power is:

• Sold to a distribution licensee;
• Sold to a third party; or
• Used for captive consumption.

Electricity-duty exemption does not mean free electricity or free grid access. Transmission, wheeling, scheduling, system-operation and other charges may continue to apply unless separately exempted.

Transmission-line support

The reimbursement is linked to construction, commissioning and achievement of the project’s commercial operation date. The developer remains responsible for costs beyond the eligible line length and for other infrastructure such as bays, substations or grid strengthening where required.

Wheeling and transmission concessions

For eligible standalone projects above 5 megawatts, the policy summary provides:

• Full exemption from intra-state wheeling and transmission charges where electricity is sold to the Uttar Pradesh Power Corporation Limited;
• A 50 per cent exemption for captive use and third-party sale;
• Specified relief relating to interstate sale through the intra-state transmission system.

These provisions remain subject to the regulations and orders of the Uttar Pradesh Electricity Regulatory Commission. The policy cannot by itself override later regulatory amendments.

Energy banking

The policy envisages annual energy banking of up to 100 per cent under the applicable captive and renewable-energy regulations. The facility may continue for the useful life of the project or 25 years, whichever is shorter.

Banking allows surplus electricity generated at one time to be adjusted against electricity drawn during another period, subject to regulatory charges, settlement periods and restrictions. It is not equivalent to physical storage of electricity without cost.

What support is available for battery storage?

The policy provides a capital subsidy of Rs 2.5 crore per megawatt for:

• Utility-scale solar projects of at least 5 megawatts equipped with four-hour battery storage; and
• Standalone battery-storage systems charged only from solar energy.

The electricity must be intended for sale to a distribution licensee or the Uttar Pradesh Power Corporation Limited.

The provision should not be interpreted as a general subsidy for household batteries, electric-vehicle batteries or storage systems used only for private backup. Project size, four-hour storage capability, solar charging and the power-sale arrangement are central eligibility conditions.

Pumped-storage plants are addressed separately through the Uttar Pradesh Industrial Investment and Employment Promotion Policy and other applicable frameworks.

What support is available under PM-KUSUM?

The policy includes provisions for agricultural-pump and feeder solarisation under specified components of the Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan.

For eligible grid-connected pump solarisation, it provides additional state support of:

• 70 per cent for eligible Scheduled Tribe, Vantangia and Musahar farmers;
• 60 per cent for other eligible farmer categories.

These amounts are described as additional state assistance alongside Union government support.

For solarisation of segregated agricultural feeders, the policy provides viability-gap funding of up to Rs 50 lakh per megawatt, in addition to applicable central assistance. Project allocation is to be undertaken through competitive bidding, and purchase of electricity by the Uttar Pradesh Power Corporation Limited requires an executed power-purchase agreement.

The original policy provisions must be read with the latest PM-KUSUM guidelines, allocations and state implementation orders because the Union scheme’s structure and deadlines may change.

How is land provided?

The policy permits government land to be made available for solar projects or parks on a 30-year lease.

The prescribed rates are:

• Re 1 per acre per year for eligible state or Union public-sector undertakings and specified public-sector solar-park developers;
• Rs 15,000 per acre per year for private-sector solar-park developers.

The land is non-transferable. Where project work is not initiated within three years of allotment, the policy provides for the land to be taken back.

For a solar project, land availability may be considered at up to 5 acres per megawatt. Private agricultural land may also be purchased or leased, with specified facilitation under the Uttar Pradesh Revenue Code.

The policy provides deemed treatment for certain agricultural-to-non-agricultural land declarations and permission to purchase land above the otherwise prescribed ceiling after project registration or approval. This is procedural facilitation, not an exemption from title verification, lease registration or other applicable land laws.

How are solar projects allocated?

Projects selling electricity to a distribution company are generally to be awarded through competitive bidding under Ministry of New and Renewable Energy guidelines.

A developer’s tariff, project capacity, commissioning obligations and performance security are normally determined through the tender and power-purchase agreement rather than by the solar policy alone.

Projects may also be developed for:

• Captive consumption;
• Group captive use;
• Third-party sale;
• Partial captive use combined with third-party sale.

Open-access projects must comply with grid-connectivity, metering, scheduling, energy-accounting and electricity-regulatory requirements. Registration under the policy does not guarantee that a distribution company will purchase all electricity produced.

How can a developer access the policy benefits?

Uttar Pradesh New and Renewable Energy Development Agency is the nodal agency and is intended to function as a single-window facilitator.

The broad process involves:

• Identifying the project category and power-sale model;
• Selecting land and obtaining title or lease documentation;
• Registering the project with the nodal agency;
• Applying for grid connectivity;
• Participating in competitive bidding where power is to be sold to a distribution company;
• Executing a power-purchase or open-access agreement;
• Obtaining land, electrical-safety, fire and other applicable approvals;
• Constructing the project and transmission facilities;
• Achieving the commercial operation date;
• Applying for the applicable stamp-duty, electricity-duty, transmission or capital assistance;
• Submitting audited expenditure and commissioning evidence.

Projects of 5 megawatts and above fall within the approval role assigned to the State Level Empowered Committee. District-level committees are intended to address implementation problems at the local level.

A registration certificate facilitates coordination with departments, but it does not replace each department’s statutory authority or guarantee approval.

What support is available to solar-equipment manufacturers?

The Solar Energy Policy promotes the establishment of manufacturing facilities for solar equipment but does not set out a separate universal manufacturing subsidy.

Eligible manufacturers may instead claim incentives under the applicable Uttar Pradesh Micro, Small and Medium Enterprises Promotion Policy or the Uttar Pradesh Industrial Investment and Employment Promotion Policy, depending on the nature and scale of investment.

Manufacturing incentives should therefore be calculated under the relevant industrial policy rather than assumed from the Solar Energy Policy itself.

What skill-development measures are proposed?

The policy aims to train 30,000 young people as Surya Mitras over five years.

Training is intended to cover the installation, operation, maintenance and repair of systems such as solar street lights and solar-power plants. The policy refers to training through Uttar Pradesh New and Renewable Energy Development Agency centres, the Uttar Pradesh Skill Development Mission and centres certified by the National Institute of Solar Energy.

The 30,000 figure is a training target. It should not be presented as the number already trained or employed without updated official evidence.

Implementation and progress so far

The policy remains listed on the official Invest UP and Uttar Pradesh New and Renewable Energy Development Agency portals. The state has issued a separate order implementing the full stamp-duty exemption for qualifying solar-project land.

An official government update published in March 2025 stated that Uttar Pradesh’s solar capacity had increased from 288 megawatts in 2017 to approximately 2,653 megawatts. This is a statewide installed-capacity figure and cannot be attributed entirely to projects approved under the 2022 policy.

The state has also promoted solar parks, agricultural solarisation, solar cities and rooftop installations. Official investment announcements include proposals for large solar-generation and module-manufacturing projects, but a proposal or memorandum of understanding should not be described as commissioned capacity.

The official sources reviewed did not provide a consolidated policy dashboard showing:

• Capacity registered under the policy;
• Projects receiving final approval;
• Capacity commissioned specifically under the policy;
• Residential rooftop subsidies disbursed;
• Battery-storage subsidy sanctioned;
• Transmission assistance reimbursed;
• Government land allotted;
• Surya Mitras trained;
• Progress against each component of the 22,000-megawatt target.

The 22,000-megawatt figure should therefore continue to be described as the FY27 target unless final official achievement data are published.

How does the policy support Uttar Pradesh’s wider energy strategy?

The policy connects utility-scale power, rooftop generation, agriculture, storage, transmission and solar manufacturing.

Utility-scale plants can contribute to the distribution companies’ renewable-purchase obligations. Rooftop systems can reduce electricity drawn from the grid at the consumer’s premises. Agricultural feeder solarisation can supply daytime renewable power for irrigation, while storage projects can help manage solar energy’s variable output.

The policy also envisages a green-energy corridor in Bundelkhand to facilitate evacuation from large solar projects. However, planned transmission capacity should not be confused with a fully commissioned corridor unless official project-completion data confirm it.

Key challenges and limitations

• Large capacity gap: The 22,000-megawatt target is substantially higher than the installed capacity reported in the official March 2025 update.

• Land requirements: Utility-scale projects need large, contiguous parcels and adequate grid access.

• Transmission constraints: A project cannot operate commercially without timely connectivity, substations and evacuation capacity.

• Regulatory dependence: Banking, open access, wheeling, metering and grid charges remain subject to electricity-regulatory changes.

• Subsidy reimbursement: Rooftop and infrastructure assistance may be paid only after installation, commissioning and verification.

• Distribution-company finances: Power procurement depends on tender outcomes, renewable obligations and the commercial interests of the purchasing utility.

• Limited disclosure: Policy-specific approvals, commissioned capacity and disbursement data are not consolidated publicly.

What developers and consumers should keep in mind

A prospective applicant should verify:

• The applicable project category;
• Whether the project is rooftop, utility-scale, captive, third-party or distribution-company linked;
• Current Uttar Pradesh Electricity Regulatory Commission rules;
• Grid-connectivity feasibility;
• Land title and land-use treatment;
• Stamp-duty certification before registration;
• Power-purchase or open-access requirements;
• Eligible subsidy components;
• Technical specifications for storage;
• Commissioning deadlines;
• Restrictions on receiving duplicate state subsidy for the same system.

The policy states that subsidy is admissible only for eligible systems purchased or constructed after its promulgation and that the same system cannot receive duplicate assistance under another state government scheme.

FAQs

What is the principal target of the policy?

It aims to establish 22,000 megawatts of solar-power capacity in Uttar Pradesh by FY27.

What state subsidy is available for residential rooftop solar?

The policy provides Rs 15,000 per kilowatt, capped at Rs 30,000 per eligible consumer.

Does every solar project receive a capital subsidy?

No. The major capital subsidy in the policy applies specifically to qualifying utility-scale or standalone battery-storage projects linked to solar energy.

What battery-storage subsidy is available?

Eligible projects may receive Rs 2.5 crore per megawatt, subject to a minimum 5-megawatt capacity, four-hour storage and other conditions.

Is stamp duty exempt?

The policy provides full exemption from chargeable stamp duty on qualifying land purchased or leased for a solar project or solar park.

Is electricity duty exempt?

Eligible solar projects may receive full electricity-duty exemption for ten years.

Which agency implements the policy?

The Uttar Pradesh New and Renewable Energy Development Agency is the nodal agency.

How long is the policy valid?

It operates for five years from issuance or until a new policy is notified, whichever occurs earlier.

Conclusion

The Uttar Pradesh Solar Energy Policy, 2022 is a wide-ranging framework covering utility-scale plants, rooftop systems, solar parks, agriculture, storage, land and grid connectivity.

Its central target is 22,000 megawatts by FY27. Key incentives include residential rooftop assistance, full stamp-duty exemption, ten-year electricity-duty relief, transmission support in Bundelkhand and Purvanchal, and a battery-storage subsidy of Rs 2.5 crore per megawatt for qualifying projects.

Its effectiveness must be assessed through commissioned capacity rather than project announcements. The principal indicators are capacity actually connected to the grid, rooftop systems commissioned, subsidies disbursed, storage installed, transmission infrastructure completed and progress against the individual FY27 targets.

Sources

• Uttar Pradesh Solar Energy Policy, 2022, Department of Additional Sources of Energy, Government of Uttar Pradesh.
• Solar Energy Policy, 2022 — official policy summary, Invest UP, Government of Uttar Pradesh.
• Policies, Uttar Pradesh New and Renewable Energy Development Agency, Government of Uttar Pradesh; policy listed with date December 2, 2022.
• Renewable Energy Sector, Invest UP, Government of Uttar Pradesh.
• Government orders relating to renewable-energy programmes, Uttar Pradesh New and Renewable Energy Development Agency.
• Official notification on stamp-duty exemption for solar-project land, Government of Uttar Pradesh; April 2023.