Key Policy Announcements for Solar and Other Renewables from January 2020

The first month of the year saw several state policies in the making


The month of January witnessed some key policy announcements that were aimed at facilitating the growth of the renewable sector in the country and removing the bottlenecks for fostering a wider adoption of renewables.

Central Government Policies

The Ministry of New and Renewable Energy (MNRE) published a clarification for the second phase of its rooftop solar program under which distribution companies—or its authorized agencies will invite Expressions of Interest (EoI) for empaneling the agencies to supply, install, test, and commission rooftop solar systems in residential premises. However, to ensure the quality and post-installation services, only manufacturers of solar panels and system integrators who fulfill the pre-determined technical and financial criteria would be eligible to participate in the bidding process.

The Ministry of Power (MoP) asked the state and union territory governments to request the state electricity regulatory commissions (SERC) to consider reducing the retail power tariff to consumers who purchase power through prepaid meters. It also stated that the necessary changes in the relevant regulations, orders, or mechanism to reduce the power tariff in case of advance payments or prepayments by the consumers, should be implemented six months from the time of issuance of the letter.

The MNRE issued a circular stating it has held talks with the Department of Financial Services, Ministry of Finance, and the Insurance Regulatory and Development Authority of India (IRDAI) regarding the availability of insurance products for domestic solar modules. The insurance of solar products is a crucial component for developers in the solar ecosystem, and currently, there are not many players in this business.

The MNRE released a draft plan to supply round-the-clock (RTC) power from renewable (solar, wind, and hydro) projects, which will be complemented with power from thermal projects.

The MNRE has asked for feedback from various stakeholders, including the Ministry of Power, renewable energy associations, and state governments and their power distribution companies, among others. The first phase of JNNSM provided for the ‘bundling’ facility, where solar power could be bundled with the comparatively cheap thermal power from the unallocated quota generated at National Thermal Power Corporation (NTPC) coal-based stations.

The Ministry of Environment, Forest and Climate Change (MoEF & CC) notified that the issue of license for the import of hydrochlorofluorocarbon (HCFC)-141b would be prohibited from January 1, 2020. This move comes after the ministry amended a set of regulations and renamed it as ‘Ozone Depleting Substances (Regulation and Control) Amendment Rules, 2019.

State Government Policies

The Uttar Pradesh Energy Regulatory Commission (UPERC) reviewed its regulations for captive and renewable energy generating projects (CRE Regulations, 2019) in response to a petition from the Uttar Pradesh Power Corporation Limited (UPPCL). The UPPCL had filed an instant petition seeking the inclusion of specific provisions and amendments in the existing CRE Regulations.

In a significant development, the Madhya Pradesh Electricity Regulatory Commission (MPERC) amended regulations for co-generation and generation of electricity from renewable energy sources. This is its eighth amendment to the regulations issued in 2010. As part of the amendment, the MPERC has defined “captive renewable energy generation source” as a project set up by any person to generate electricity primarily for his own use and includes a project set up by any co-operative society or association of persons for generating electricity primarily for use of members of such co-operative society or association.

In another development, the Jharkhand Electricity Regulatory Commission (JSERC) published regulations for Renewable Purchase Obligation (RPO) for obligated entities within the state. The earlier regulations are set to expire in March 2020. RPO is the single most important policy driving renewable energy installations in India towards achieving its aggressive goal of installing 175 GW by 2022, with solar comprising 100 GW of this portfolio. These regulations will apply to distribution licensees, captive users, and open access consumers within the state.

The month of January also saw the Himachal Pradesh Electricity Regulatory Commission (HPERC) announce the generic levelized tariffs for solar PV projects for the last six months of the financial year 2019-20. In December 2019, the Commission had requested the major stakeholders to send their suggestions on the proposal. The proposed tariff will be applicable only for small capacities up to 5 MW. The Commission prefers that distribution licensees purchase power from higher capacity projects through Solar Energy Corporation of India (SECI) or competitive bidding route.

The Chhattisgarh State Electricity Regulatory Commission (CSERC) issued a draft order announcing generic levelized tariffs for the fiscal year (FY) 2019-20 and 2020-21 for renewable energy sources. The generic tariff would be set on a levelized basis for the tariff period from the commercial operation date (COD) of the projects up to the useful life of the projects. The useful life of a small hydro project is considered to be 35 years and 25 years for solar photovoltaic (PV).