Punjab Electricity Duty Exemption (Expansion)
Department of Industries & Commerce, Government of Punjab · Central government
Punjab manufacturing units expanding or adding renewable energy can claim electricity duty exemption on extra power use, up to 100% of Fixed Capital Investment.
Open, rolling. Applications are accepted continuously — there is no deadline.
Key facts
- Subsidy amount
- Not specified
- Instrument
- Subsidy
- Deadline
- Rolling
- Disbursement
- Reimbursed after spend
About this scheme
The Government of Punjab offers an Exemption of Electricity Duty as an incentive under its Industrial Policy 2022. The scheme is intended for existing manufacturing units in the state that are carrying out substantial expansion, modernisation or diversification. Units that are integrating renewable energy sources, including solar power, into their operations are also eligible for the benefit.
The incentive works by reducing the operational costs that arise from higher power consumption, whether that consumption grows because of business expansion or because of a shift towards sustainable energy. Through the electricity duty exemption, the state government aims to support industrial growth, draw investment into modern infrastructure and encourage the uptake of environmentally friendly energy solutions, contributing to economic development as well as environmental sustainability in Punjab.
The support is structured to lower a significant recurring expense for industries, which in turn makes expansion and the adoption of green energy more financially viable. It reflects the state's effort to maintain a business environment conducive to its manufacturing sector.
Who can apply
- Eligible business forms
- Private limited company, Limited liability partnership, One person company, Partnership firm, Sole proprietorship
- Udyam registration
- Not specified
- MSME registration
- Not specified
- DPIIT startup recognition
- Not specified
- GST registration
- Not specified
- Where the business may be based
- Punjab
- Manufacturing units that are already in operation and are carrying out expansion, whether or not accompanied by modernisation or diversification. - Units that are setting up renewable energy or solar power installations.
How to apply
Manufacturing units seeking exemption from Electricity Duty must apply through the procedure laid down under the wider Industrial Policy 2022. In practice, this means filing a formal application with the nominated department — generally the Department of Industries and Commerce, Government of Punjab.
The steps ordinarily involved are: - Filing detailed project reports or supporting documents covering expansion, modernisation, diversification, or renewable energy installation. - Furnishing electricity consumption records for the previous 3 years or 12 months, whichever applies, so that incremental consumption can be calculated. - Securing certification from the Punjab State Power Corporation Limited (PSPCL) on power consumption data and the incremental rise. - Producing evidence of Fixed Capital Investment (FCI) incurred during the expansion. - Complying with any formats or declarations stipulated under the Industrial Policy 2022.
State authorities will then verify the application to establish eligibility and determine the extent of the exemption.
Frequently asked questions
What is the primary benefit of the Electricity Duty Exemption program?
Eligible manufacturing units in Punjab can claim an exemption on Electricity Duty for the additional power they consume, which lowers their running costs.
Who is eligible to apply for this exemption?
Expansion, modernisation or diversification by an existing manufacturing unit qualifies it for this benefit, and the same applies to units that install renewable energy or solar power systems.
How is the incremental power consumption calculated for the exemption?
The increase in power consumption is measured against whichever is greater: the average consumption of the previous 3 years, or that of the 12 months preceding the expansion's start date. The concerned PSPCL officer certifies this calculation.
Is there a maximum limit to the exemption amount?
Yes — the exemption can cover the full 100% of the Fixed Capital Investment (FCI) the unit has made under its expansion, modernisation or diversification project.
How does the exemption apply to units installing renewable energy?
Units that install renewable energy, including solar power with net metering, are assessed on the combined figure of the incremental change in units drawn from PSPCL and the units produced by their Renewable Energy/Solar Power Plant.
What is Fixed Capital Investment (FCI)?
Fixed Capital Investment (FCI) is the total amount an industrial unit puts into fixed assets — land, building, plant, machinery and other infrastructure — as part of an expansion, modernisation or diversification project.
Sectors
- Manufacturing Industrial
- Climate Energy Ev
- Manufacturing
- Electricity Duty
- Renewable Energy
- Solar Power
- Industrial Expansion
- Policy Incentive
Details last verified on 16 September 2026. Source: the issuer's published information.