National Lab Policy May Cause Solar Project Delays Due to Lack of Testing Centers

While industry players are unhappy about the timing of the policy and the lack of labs, MNRE feels that the policy is well-timed for the booming sector


As India’s solar sector moves forward toward achieving its goal of 100 GW of solar by 2022, the recently announced National Lab Policy is adding a new wrinkle that could slow down project commissioning, according to solar project developers and manufacturers.

In 2017, MNRE issued an order with an eye toward quality project development in the sector. The order, named “Solar Photovoltaics, Systems, Devices, and Components Goods (Requirements for Compulsory Registration) Order 2017,” was issued keeping in mind that solar project developers look to procure the cheapest possible components to facilitate bidding at the lowest-possible tariffs in solar auctions.

In its order, the MNRE stated, “Any manufacturer who manufactures, stores for sale, sells or distributes goods must make an application to the Bureau of Indian Standards (BIS) for obtaining registration for use of the standard mark in respect of the Indian standard.”

The order, though well-intentioned, has irked many domestic project developers because of its timing and implementation. In India, there’s a dearth of BIS-accredited laboratories or organizations that can conduct quality checks and testing in order to provide the necessary accreditation for the seamless development of projects.

“The reasons behind implementing a lab policy for testing in the renewable energy sector are quite valid. But, on the other hand, it is not a good move to implement a new testing policy without the adequate number of labs needed to conduct the tests. It comes across as though government agencies are simply checking off a list and saying they have done their part and passing the risk on to developers and manufacturers. The sector already has safeguard, anti-dumping, and port duties to worry about without adding this new uncertainty around testing to the mix,” said Raj Prabhu CEO of Mercom Capital Group.

The National Lab Policy for renewable energy testing and accreditation was created to improve  quality and reliability of renewable energy projects in India. MNRE believes that the country’s target of 175 GW of renewable energy by 2022 has made it necessary to develop and update the standards for various renewable energy systems and their related components and set up performance testing and certification facilities to ensure their quality.

Under the National Lab Policy, the MNRE made it mandatory that all the test labs must be accredited by the National Accreditation Board for Testing and Calibration Laboratories (NABL) and approved by the Bureau of Indian Standards (BIS).

The National Institute of Solar Energy (NISE), the National Institute of Wind Energy (NIWE), the Alternate Hydro Power Energy Centre (AHEC), the Sardar Swaran Singh National Institute of Bio-energy (SSS-NIBE), and other test centers for solar, thermal, and biogas were established by MNRE to scale up the quality of renewable projects in the country.

However, these institutions will not be enough to ensure the quality of the products in the light of the massive 175 GW renewable energy target that has to be achieved in the next four years, according to many solar companies. The lack of proper testing centers may instead slow down the expansion of renewables in the country as it would lead to a long queue of manufacturers and developers waiting to get the necessary accreditation before they can begin with the development.

When asked about the policy, Mercom’s source at a module manufacturer and engineering, procurement, and construction (EPC) company complained, “The standards mentioned are completely different, if not contradictory to any norms practiced in any other country. We already have IEC (International Electrotechnical Commission) and BIS is a repeat of IEC. What is the need of this?”

“Moreover, there are no sufficient certified labs in India to undertake these tests. We only have the test lab called UL and they already have a backlog of six months, so everything is delayed unnecessarily. There are a lot of bureaucratic issues that are delaying the process further,” the official added.

Elaborating on the issues faced by domestic project developers, the source added, “Then again, in IEC testing there is something called an exemption for process of similarity. If EVA (ethylene-vinyl acetate) and back sheet are tested once, they don’t have to be tested again for all the combinations. But BIS demands that every bill of material be tested separately. There are 20-25 combinations of materials and imagine how long it will take to test each combination. We have been given time till September 2018, but that is not sufficient time given the fact that there are no labs. Let them introduce complimentary tests, not just a repeat of IEC standards. This is not the way to ensure the right quality of products. Developers are really struggling with all of this uncertainty.”

Talking to Mercom, another executive working with a leading project developer said, “The government says something and does something else. They have issued a tender trajectory for 17 GW of solar, but where is the intent? Tell me, if labs are scarce, how can the projects be developed? Due to anti-dumping, safeguard duty, and port duty uncertainties, project development has been slow. Now, wait for the lab to certify that the module cells are of good quality will waste time as well as capital. For proper implementation, they should have first developed test centers across the country in large numbers.”

Another module manufacturer reiterated the lack of proper implementation on the part of the government saying, “It is a good move to maintain quality and keep a quality check, but when it comes to the implementation, it will be delayed. There are not many test centers or labs in the country, and as things go in India, once a project is delayed that’s not the last time we hear the word delay. First, a few more test centers should have been developed before this order should was issued. Right now, as things stand, even though it is a good decision, it will add to the slowdown in the sector, unless a proper number of test centers comes up.”

Mercom communicated with a few other industry sources and the popular sentiment on the issue was the same: the new policy is a good move with a bad timing. Many of the industry players feel that this is not the correct time for such a policy considering where the market is right now. The sources unanimously voiced their concerns about the dearth of avenues available in India for proper testing and accreditation.

To delve deeper into the issue, Mercom also got in touch with MNRE to listen to their perspective on the matter. Speaking to Mercom, an MNRE official commented, “If not now, then when? We have crossed almost 20 GW of solar installations in the country, so should we wait up to the point when suddenly there’s a surge in projects whose CUFs are falling?”

On the lack of proper test centers, the MNRE official said, “It will take some time to develop test centers and we have already developed some across the country. But that does not mean the order is not in the best interests of the sector. We have been hearing from stakeholders that project quality should improve. This policy will ensure that even if there is a dearth of test centers, developers know that the order is in place and they will refrain from utilizing cheap, faulty modules for project development.”

The MNRE official further added, “It’s better to be late than never. If there is a delay of a few months, we can work around it, but imagine when we have MWs of projects being constructed and commissioned every few months, can the sector withstand the breakdown of projects? Non-performing assets will drive away banks and other investors.”

“At MNRE we just don’t think of now, we have to plan for the future. As of now, TUV Rhineland and Photovoltaik Berlin are investing in India to open centers for testing. Many more will follow,” added the MNRE official.

While the grievances of the project developers are justified, MNRE says the policies have been formulated with the best interests of the country’s renewable sector and its stakeholders in mind.

“With so many uncertainties facing the market, it is crucial for the Ministry to find a solution to make it less burdensome for the industry and prevent delays,” added Prabhu.