Gujarat Urja Vikas Nigam Limited(GUVNL) has withdrawn its subsidy for small-scale distributed solar projects, affecting around 4,000 solar projects having an average capacity of 2,500 MW power. The power purchase price was Rs 2.83 per unit, which was already lower than other states such as Maharashtra and Rajasthan, where the Power Purchase Agreement (PPA) tariff rates were set higher than Rs 3.15 per unit. In March 2019, the government announced the policy for the development of small-scale distributed solar power projects to encourage the distributed generation of solar power. This scheme was supposed to encourage PM Narendra Modi's ambitious renewable energy targets. Gujarat's power companies distribution generation was expected to reduce transmission losses, farmers get electricity throughout the day, benefit the environment, and even benefit the Centre and state government from Goods and Services Tax (GST) revenue. According to the policy, eligible entities can set up a solar power plant of capacity from 0.5 MW to 4 MW and supply the generated power to the nearest Gujarat Energy Transmission Corporation Limited (GETCO) substation. About Rs 100 crore have been invested by Micro, Small and Medium Enterprise (MSME) for registration with distribution companies (discom) or Gujarat Energy Development Agency (GEDA) to discoms PGVCL, UGVCL, DGVCL, and MGVCL (Paschim, Uttar, Dakshin, and Madhya Gujarat Vij Company Limited, respectively) through advanced charges for the transmission line, supervision, and connectivity. Rs 1,000 crore have been invested by the developers and proposed to invest Rs 10,000 crore. Gujarat's state government is now apprehensive in providing the promised subsidies. It has also decreased investor sentiment who are looking to switch to the states that give higher returns. It will effectively negate the state's effort in incentivising and building a green state. The Associated Chambers of Commerce and Industry in India, ASSOCHAM, and other solar industries have also directed that these solar projects will provide employment opportunities to more than 30,000 people for 25 years. Image Source Also read: Gujarat's RE power capacity to be around 61,466 MW by 2030