A meeting cabinet chaired by Chief Minister Shri Shivraj Singh Chouhan endorsed new solar energy policy-2012 of the state. A promotion policy was implemented by Madhya Pradesh government in year 2006 to promote generation of power through non-conventional sources of energy. The policy expired in October 2011. The new policy provides for 10-year exemption in electricity fee and cess, four percent subsidy by the State Government in wheeling charges, banking of generated power, eligibility for reduction in contractual demand in case of power purchase by third party, according status of industry to project, exemption as per rules in VAT and entry tax and 50 percent exemption in stamp duty on purchase of private land. Under the policy, four solar parks of 200 MW capacity each will be established. Construction will be made under PPP mode. Solar projects have been selected in four categories under the policy. The first category includes the projects selected by Madhya Pradesh State Power Distribution Company or Madhya Pradesh State Power Management Company on the basis of open tender. The second category includes the which will sell power through free access within or outside the state through free purchase. Projects of the third category will be established through renewal energy certificate method. The fourth category projects will be set up under National Jawaharlal Nehru Solar Mission. The policy provides for performance guarantee deposit for ensuring time-bound establishment of projects. For getting maximum benefit provisioned in the policy, maximum generation capacity has been fixed as 100 MW for projects to be established on government land. There is provision of making available government land at the rate of three hectares per megawatt. It may be mentioned that Madhya Pradesh is among those three states where solar rays are available in abundance. Due to it, commercial generation of solar energy is possible in the state. About 297 MW capacity solar projects have been set up or being established in the state. Country’s biggest solo solar project is under construction in Neemuch district. Its capacity is 130 megawatts.