Author: PPD Team Date: 21/03/2025
The Madhya Pradesh government has introduced the Madhya Pradesh Renewable Energy Policy 2025, setting a goal to meet 50 percent of its annual power consumption from renewable sources by 2030. The policy, which will be in effect for five years, applies to all renewable energy projects with a capacity of at least 500 kW, excluding decentralised systems.
The state has laid out a phased approach, aiming for a renewable energy share of 20 per cent by financial year (FY) 2024, 30 per cent by FY 2027, and 50 per cent by FY 2030. Government departments have stricter targets, with 50 per cent compliance required by 2027 and full compliance by 2030.
To boost renewable energy capacity, the state plans to develop 10,000 MW of renewable energy and hybrid parks by FY 2027. Additionally, 4,000 MW of renewable energy projects will be dedicated to power exports outside the state by FY 2024, increasing to 10,000 MW by FY 2027. The investment targets include Rs 150 billion for renewable energy generation by 2024, rising to Rs 500 billion by 2027. In renewable equipment manufacturing, the state expects Rs 40 billion in investment by 2024 and Rs 100 billion by 2027.
Incentives to drive investments
The policy introduces several incentives to attract investors. Developers will benefit from a 100 per cent electricity duty exemption for ten years, a 50 per cent reimbursement on stamp duty for private land purchases, and a 50 per cent rebate on circle rates for government land. Energy storage projects will receive a 20 per cent exemption on registration fees, a 10-year electricity duty waiver, and up to 15 per cent stamp duty reimbursement.
Green hydrogen projects will receive up to Rs 2 billion in investment assistance, Rs 50 million for infrastructure development, and Rs 100 million for effluent treatment plants. Mega industrial units investing over Rs 5 billion will be eligible for a customised incentive package.
For project developers, a non-refundable registration fee of Rs 100,000 per MW will be required for projects exceeding 1 MW capacity. Projects supplying over 50 per cent of their power to state discoms will be prioritised, with green hydrogen and biofuel projects receiving the highest preference.
Green zones and cities
The policy also focuses on creating green cities and zones. Cities meeting at least 30 per cent of their energy demand from renewables will be designated as green cities. The plan includes solar-powered streetlights, renewable-powered public transport, and biogas manufacturing in various stages of implementation.
Corporations consuming at least 30 per cent renewable energy and having an annual turnover of at least Rs 500 million will be eligible for green zones. These zones will enjoy a 100 per cent electricity duty waiver for ten years and a 50 per cent rebate on district-level land rates.
To support this transition, the Madhya Pradesh Power Transmission Company Limited and discoms will expand the grid infrastructure, including new substations, to integrate the rising share of renewable energy.