Investors who develop solar energy projects will get an additional $0.01 to $0.02 (about Shs25-50) for each unit of electricity they sell under the Global Energy Transfer Feed-in Tariffs (GET FiT) programme.
GET FiT is a scheme through which developers of renewable electricity projects of between 1 Megawatt (MW) and 20MW get a top-up for each unit of electricity they sell to the national electricity grid.
Until now, GET FiT only applied to hydro, biomass and bagasse projects.
Solar energy had been left out because there was no feed-in tariff for it since Uganda is yet to exploit its potential.
But with the actualisation of solar projects in Kenya and Ethiopia, Uganda has not got an indication of what the solar tariff could be.
However, through the GET FiT programme, 15 renewable electricity projects will be developed and shall on completion add 125MW to the national grid. The power plants should be complete by 2016.
The country has to increase its installed power generation capacity to mitigate unmet demand for electricity.
According to the Electricity Regulatory Authority, the demand for energy is growing by between 10 per cent and 15 per cent annually.
This means the country has to increase its installed electricity generation capacity by 50MW annually to the national power grid to offset load-shedding.
The development partners of the project include Norway, which is contributing €5.05 million (Shs17.2b) and Germany €15m (Shs51.8b).