Major Events that Impacted the Solar Sector in 2023

India’s cumulative installed solar capacity stood at over 69 GW at the end of September 2023


India installed 5.6 GW of new solar capacity during the first nine months of 2023, a decrease of 47% year-over-year, according to Mercom India Research’s Q3 2023 India Solar Market Update. India’s cumulative installed solar capacity stands at over 69 GW as of September 2023.

Here is a list of developments that significantly impacted the Indian solar sector in 2023.

Project extensions

The Ministry of New and Renewable Energy (MNRE) extended the timeline for the completion of solar and wind-solar hybrid projects for which bids were finalized before March 9, 2021. The extension was provided until March 2024. The Basic Customs Duty (BCD) on imported solar modules and cells took effect on April 1, 2022, and many projects for which bids were finalized before the announcement but were delayed due to the COVID-19 pandemic and the resultant supply chain disruptions now come under the purview of the BCD.

The Ministry also granted an extended completion time up to March 2024 for solar and solar-wind hybrid power projects, with bid submission dates falling between March 9 and April 10, 2021. The time extensions were granted in response to the representations received from state government agencies, which had issued bids with submission dates during that period.

MNRE warned solar developers that time extensions granted to solar and wind-solar hybrid projects in the wake of COVID-19 and BCD imposition are not blanket extensions but are subject to case-by-case approval after examination of specific circumstances and supporting documents. It directed all renewable energy implementing agencies to grant extensions only to projects that have shown due diligence and progress in their implementation.

DCR waiver extension

The government extended the domestic content requirement (DCR) waiver for solar cells used for projects under Component C of the Pradhan Mantri Kisan Urja Suraksha evam Utthan Mahabhiyan program until March 31, 2024. The move was a continuation of the memorandum issued by the Ministry on August 1, 2022, which extended the DCR waiver until June 20, 2023. Component C, also known as Feeder Level Solarization, plays a pivotal role in the PM KUSUM program, with its objective to solarize 15 lakh grid-connected agriculture pumps by March 31, 2026.

New bidding guidelines

The Ministry of Power introduced new guidelines for tariff-based competitive bidding for grid-connected solar power projects, aiming for transparency, fair procurement, and competitive prices. Bidders will be allocated the power capacity they offered only if their tariff offers fall within 2-5% of the lowest bid. A maximum of 50% of the total capacity specified in the request for selection can be allocated to a single bidder. The power purchase agreement is 20 years from the scheduled commissioning date. However, it may be extended up to 25 years if the procurer grants an extension due to circumstances beyond the generator’s control.

Bidding trajectory

MNRE issued an agency-wise bidding calendar for 50 GW of renewable energy projects for the current financial year 2023-24. The calendar entails a schedule of 30 GW of renewable capacity for the first two quarters and 20 GW in the last two quarters. SECI and NTPC will issue 12.5 GW of Solar/Hybrid/Round-the-Clock (RTC) project tenders. NHPC and SJVN will issue 7.5 GW of Solar/Hybrid/RTC project tenders.

ALMM exemption

MNRE said solar projects commissioned by March 31, 2024, will be exempted from procuring modules listed under the Approved List of Models and Manufacturers (ALMM). The Ministry informed that its office memorandum of 2019 mandating the use of only those modules enlisted under the ALMM order and subsequent amendments until the latest one on October 7, 2022, will be suspended for one financial year.