MNRE Cracks the Whip on Laggard Solar Projects, Says No Blanket Time Extensions

Time extensions will be granted only on merit and on a case-by-case basis


The Ministry of New and Renewable Energy (MNRE) has warned solar developers that time extensions granted to solar and wind-solar hybrid projects in the wake of COVID-19 and basic customs duty (BCD) imposition are not blanket extensions but are subject to case-by-case approval after examination of specific circumstances and supporting documents.

The move comes weeks after the government, in an unprecedented decision, directed public sector units to blacklist renewable energy developers that fail to complete projects on time.

Government sources said that the ministry had played its role in helping developers ramp up capacity when it suspended the ALMM mandate until next March, despite opposition from module manufacturers.

Now the ministry is keen to weed out the ‘bad apples’ from among the existing developers who have been cornering projects in competitive bids without the ability to execute them, primarily due to the unviable quoted tariff. This has resulted in delays in securing land, financing, and equipment for solar projects.

In its latest notification, the MNRE has directed all renewable energy implementing agencies (REIAs) to examine requests for a time extension on a case-by-case basis and grant extensions only to those projects that have shown due diligence and progress in their implementation. The REIAs must verify the developers’ claims with supporting evidence and regularly monitor their progress.

The notification also states that projects that are merely sitting on the award will not qualify for an extension and risk cancellation of the project. It warns developers not to use COVID-19 as an excuse for non-performance. It expects them to have made adequate arrangements for land acquisition, equipment procurement, and financing before bidding for projects.

The government suspended the application of the Approved List of Manufacturers and Models (ALMM) mandate until March 31, 2024, as it felt that continuing ALMM restrictions would stymie India’s solar progress.

The MNRE had granted a time extension up to March 2024 for under implementation of solar and solar-wind hybrid projects whose bids were finalized before March 9, 2021. The extension was given in the context of the BCD imposition on solar modules and cells.

In December last year, the ministry granted a timeline extension until September 30, 2024, for solar projects under the Central PSU program implemented by the Solar Energy Corporation of India and the Indian Renewable Energy Development Agency on account of supply chain disruptions.

Due to the pandemic, the ministry also extended timelines for all under-construction projects in 2020.

The ALMM mandate has resulted in delays in project development. India could only add 13 GW of solar capacity in 2022 but was expected to achieve much higher installations, according to the 2022 Q4 & Annual India Solar Market Update.

The ministry aims to improve the quality and efficiency of solar projects in India and achieve the target of installing 450 GW of renewable energy capacity by 2030, of which 280 GW is the target for solar.