According to NPC officials, the budget is expected to announce interest subsidy on bank loans taken to install solar plants with capacities enough to meet the demand of a household.

A senior NPC official said the scheme has been proposed to promote rooftop solar plants in urban areas, which would help save energy from hydropower projects.

“The government will provide interest subsidy to some extent on loans taken from the banks to install the solar plants,” said the NPC official. “As it is costlier to install solar plants with higher capacities, the government has planned to subsidise interest.”

The official said the scheme has been proposed to be launched under the slogan “Ujyalo Ghar, Ujyalo Nepal”.

After Govinda Raj Pokharel’s appointment as vice-chairman of NPC, the solar energy sector is getting major government priority. Pokharel had earlier served as executive director of Alternative Energy Promotion Centre (AEPC).

Another imitative proposed by the NPC is offering subsidy on solar pumps used to irrigate farms. There have been talks about providing subsidy up to Rs 500,000 on the pumps.

Pokharel said the budget would focus on solar energy as an alternative source of power. “Obviously, there will be incentives for solar energy in the new budget,” he said.

Meanwhile, the government has also planned to purchase solar power from the private sector through the process of signing power purchase agreement (PPA).

Solar power is expected to help reduce load-shedding by saving hydroelectricity for peak hours in the evening.

According to NPC, some international companies have proposed solar power at less than Rs 10 per unit, which is quite high compared to what Nepal Electricity Authority pays to private sector hydropower developers in the dry season.

NPC, however, said a few donors are also interested in covering some losses NEA bears for purchasing solar power.