NEW DELHI: Gujarat’s new solar policy will reduce electricity costs by over 40% and expand the state’s potential as India’s renewable energy hub, Chief Minister Vijay Rupani said on Tuesday.

“Currently, the industry gets power at an average cost of Rs. 8 per unit. The new policy will help bring it down to Rs. 4.5 per unit,” Rupani said, speaking while unveiling his state’s new plan for solar power.

The policy will be effective from 2021 to 2025, and promises benefits to residential as well as commercial developers to set up new projects for power purchase agreements lasting up to 25 years. New projects can also be set up by individuals without any minimum capacity generation ceiling, Rupani said.

Prior to this, a developer had to find a contracted demand of at least 50% of the planned capacity. This stalled the construction of many projects, especially during the COVID-19 pandemic.