Besides, the Cabinet Committee on Economic Affairs approved a scheme for setting up 1,000 MW grid connected solar power projects by PSUs and Central government organisations, with a Viability Gap Funding support of Rs 1,000 crore.

The solar parks will be set up across the country during five years, from fiscal 2014-15 to 2018-19, while 1,000 MW Grid-Connected Solar PV Power Projects would be set up under various central and state schemes in three years period from fiscal 2015-16 to 2017-18.

The solar parks will be developed in collaboration with state governments and their agencies and the choice of implementing agency for developing and maintaining the park would also be decided by the state government.

The scheme will have a mandatory condition that all PV cells and modules used in solar plants set up under this scheme will be made in India.

The Finance Minister, while presenting Budget 2014-15, had announced that new and renewable energy deserves a very high priority and proposed to take up Ultra Mega Solar Power Projects in Rajasthan, Gujarat, Tamil Nadu, and Laddakh in Jammu & Kashmir for which he had set aside a sum of Rs 500 crore in the Budget.

All states and Union Territories will be eligible for benefitting under the scheme, while solar parks will enable development of solar power in remote areas where land is inexpensive, the government said in a post-cabinet statement.

As a transmission system will be developed for the entire Park, developers will not have to set up their own transmission lines.

This will not only save money but will also avoid damaging the landscape of the area as only limited transmission lines would be laid.

Further developers would be able to set up projects quickly as they will not have to get statutory and other clearances.

A number of government entities such as NTPC, NHPC, CIL, IREDA and Indian Railways are coming forward to set up solar power projects.

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