Punjab Electricity Duty Exemption (Expansion)
By Department of Industries & Commerce, Government of Punjab
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Quick Answer
Manufacturing units in Punjab that expand or install renewable energy can get electricity duty waived on extra power use, up to 100% of Fixed Capital Investment.
About this subsidy
Existing manufacturing units in Punjab that expand, modernise or diversify can get an exemption on electricity duty under the Industrial Policy 2022. Units that install renewable energy, such as solar power, can get it too.
The exemption applies to the extra power you use. That is measured against the average consumption of the preceding 3 years or 12 months from the start of expansion, whichever is higher, as certified by PSPCL. For units with a renewable energy plant, the calculation counts the net change in units drawn from PSPCL and units generated by the plant.
The benefit is capped at up to 100% of the Fixed Capital Investment (FCI) made in the project.
Eligibility
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Full eligibility criteria — entity type, stage, sector, founder profile and registration requirements — plus your fit for this program. Sign up to view.
Subsidy providers
The Department of Industries & Commerce is the Government of Punjab's department that runs the Punjab Start-up Cell. The Cell is headed by the Director of Industries and Commerce and acts as a single point of contact for the state's startup policy. The department is based at…
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What You Get
This program offers an exemption of Electricity Duty, directly translating to significant cost savings for eligible manufacturing units. The exemption is applied to the incremental increase in power consumption, which is calculated over the average consumption of the preceding 3 years or 12 months from the start of expansion, whichever is higher, as certified by PSPCL. The benefit is capped at up to 100% of the Fixed Capital Investment (FCI) made during the expansion, modernization, or diversification project. For units installing renewable energy sources like solar power, the exemption considers the total incremental increase or decrease in units consumed from PSPCL and those generated from the renewable energy plant, ensuring comprehensive support for green initiatives. This direct financial incentive helps reduce operational overheads and improves the profitability and competitiveness of industrial units in Punjab.
- Disbursement
- Reimbursement
- Bootstrap friendly
- Yes
Timelines & Process
Applications
Rolling basis
How to apply
Four steps from draft to disbursement — one action each.
- 1
See the questions before you start
Download every question this programme's application form asks, so you can prepare your answers offline before opening the portal.
- 2
Line up your documents
Keep every document from the checklist ready in one folder. Missing docs are the #1 reason applications get bounced.
- 3
Submit on the official portal
Use the official application link and verify all details before final submission.
- 4
Follow up
Reach out 5–7 days after submitting to confirm receipt and ask about the review timeline.
Program templates & documents
Files the program publishes for applicants — download these and apply in the prescribed format.
Frequently Asked Questions
What is the primary benefit of the Electricity Duty Exemption program?
The primary benefit is the exemption of Electricity Duty on the incremental increase in power consumption for eligible manufacturing units in Punjab, reducing their operational costs.
Who is eligible to apply for this exemption?
Existing manufacturing units undertaking expansion, modernization, or diversification are eligible. Additionally, units installing Renewable Energy or Solar Power systems can also claim this benefit.
How is the incremental power consumption calculated for the exemption?
The incremental increase in power consumption is calculated over the average power consumption of the preceding 3 years or the preceding 12 months from the date of start of expansion, whichever figure is higher. This calculation is certified by the concerned officer of PSPCL.
Is there a maximum limit to the exemption amount?
Yes, the exemption is available up to 100% of the Fixed Capital Investment (FCI) made by the unit during its expansion, modernization, or diversification project.
How does the exemption apply to units installing renewable energy?
For units installing renewable energy (including solar power with net metering), the exemption considers the sum of the total incremental increase or decrease in units consumed from PSPCL and the units generated from their Renewable Energy/Solar Power Plant.
What is Fixed Capital Investment (FCI)?
Fixed Capital Investment (FCI) generally refers to the total investment made by an industrial unit in fixed assets such as land, building, plant, machinery, and other infrastructure during an expansion, modernization, or diversification project.
Sources
Data on this page is compiled from official program and provider references.
