Important Government Announcements for India’s Solar Sector in June 2018

Some ambiguities regarding the GST mechanism were clarified this month


June 2018 witnessed some important policy announcements in the renewable energy sector, especially solar. These announcements and policy updates, made by both central as well as state governments, have helped clear some misconceptions in the industry at a time when a number of regulatory concerns are a big concern for the country’s solar industry.

Below are some of the highlights from the month:


The Ministry of Power (MoP), Government of India, amended the competitive bidding guidelines for the procurement of power from grid-connected solar PV projects. The MoP has increased the land acquisition period from 7 months to 12 months. Project commissioning timeframe has been increased from 13 months to 21 months from the date of PPA execution.

The MoP also issued draft amendments to Tariff Policy 2016. After the award of bids, if there are any changes to domestic duties, levies, charges, surcharges, cess and taxes which lead to changes in the cost, such a scenario will be treated as “Change in Law” and will be allowed as pass through, subject to approval by the appropriate commission.

The Central Electricity Regulatory Commission (CERC) set the national average power purchase cost (APPC) at ₹3.53 (~$0.0518)/kWh for open access.  The CERC had proposed this national APPC in April 2018 and it was open for comments by stakeholders until May 2, 2018.


The Ministry of New and Renewable Energy (MNRE) amended the guidelines for the implementation of the viability gap funding (VGF) program for solar PV projects under the National Solar Mission (NSM) Phase-II. These amendments will apply to 750 MW of grid-connected solar PV under Batch-I NSM Phase-II, 2,000 MW of grid-connected solar PV under Batch-III NSM Phase-II, and 5,000 MW of grid-connected solar PV under Batch-IV NSM Phase-II.

The MNRE also brought battery energy storage system (BESS) under the ambit of the Solar Photovoltaics, Systems, Devices, and Component Goods (Requirement for Compulsory Registration under BIS Act) Order 2017. It has assigned Indian Standard number IS 16270 to storage battery.


In the state of Maharashtra, all the grid-connected solar photovoltaic (PV) projects developed under the Mukhyamantri Saur Krushi Vahini Yojana (MSKVY) will not be required to pay property tax for a period of 30 years.

In Karnataka, the Authority of Advance Ruling (AAR) concluded that a turnkey engineering, procurement & construction (EPC) contract for the construction of solar power project in which both goods and services are supplied cannot be interpreted as a composite (a mix of components which make up a solar project) supply contract. Therefore, the supply of each component in a ‘Solar Power Generating System’ cannot have a flat tax rate of 5 percent GST.

The Maharashtra Electricity Regulatory Commission (MERC) passed a ruling stating that the benefits of net metering are limited to rooftop solar installations of up to 1 MW. MERC also clarified that generators cannot use both Open Access and Net Metering simultaneously.

The Gujarat government announced a new solar plus wind hybrid power policy in a bid to promote the simultaneous production of wind and solar power in the state. Under this policy, various benefits can be achieved by developers for a period of 25 years or through the life of the project, whichever is shorter. The hybrid policy will remain in effect for five years.

The Gujarat government has announced a program called Suryashakti Kisan Yojana (SKY) would provide farmers with solar panels to generate solar power on their lands. To qualify for this program, a farmer will need a minimum of 10 square feet for the installation on their land.  A farmer can set up more kW solar panels on the farm but will not receive additional subsidies for them.