Background

The exploitation of various sources of alternative and renewable energy like: biogas, small and micro hydropower, solar energy (Photovoltaic and Thermal), improved cook stove, wind energy, etc has great potentiality in Nepal. His Majesty Government has created the Alternative Energy Promotion Center (AEPC) with the objective of developing and promoting different sources of re'newable energy, considering the fact that'the maximum utilization of these renewable energy resources could contribute to environmental protection and sustainable rural development. Even though HMG had already provided subsidy to encourage the use of RETs for exploiting renewable energy resources, it is desirable to make necessary adjustment in the existing system of subsidy for extensive use of RETs. Government of Nepal has approved and implemented the new subsidy policy for Renewable Energy to achieve the following objectives.

Objectives

1. To Protect environment by encouraging the use of renewable energy resources and RETs in the rural areas and to provide opportunity to low income rural households to use RET's.
2. To support rural electrification as well as gradually reduce the growing gap of electricity supply, consumption, etc. between rural and urban areas. 
3. Social Equity and Programme Effectiveness
4. Cost Effectiveness and Ease in Access to Subsidy
5. Optimal Resource Utilisation
6. To make the use of grant assistance provided by donors, existing and forthcoming more effective and objective oriented and thereby attract the donors and other investor in RETs sectors.
7. To support development and extension of RET market by attracting private sector entrepreneurs.
8. To support to the envisaged targets of RETS program of the long term plan.

Updated: 21 Nov 2006