Patel said exemption from the payment of duty will be given for electricity generated from solar power generators (SPGs) used for self-consumption, or sold to the third party or distribution licensees.

Under the policy, the wheeling of electricity generated from the SPGs to desired locations for self-use within the state will be allowed at a charge of two per cent of the energy fed to the grid.

A maximum of 500 MW SPG will be allowed for installation during the operative period (upto March 31, 2014) of the solar power policy. The minimum project capacity of an SPG, in the case of solar photovoltaic (SPV) and solar thermal (ST) will be five MW each.

The minister said distribution licensees in the state are mandated to purchase solar power as per limit/sub-limit specified by the Gujarat Electricity Regulatory Commission (GERC) from time to time. The Gujarat Energy Development Agency (GEDA) and Gujarat Power Corporation Ltd (GPCL) will be the government's nodal agencies for facilitation and implementation of the policy.

It is envisaged in the policy to provide clean development mechanism (CDM) benefits to solar power project developers. They would, however, have to pass on 50 per cent of the gross CDM benefits to the licensee distributors with whom a PPA is signed.

A four-member committee headed by the Principal Secretary (Energy) has been set up to approve solar power projects on merits.