MNRE Grants Timeline Extension for Solar Projects Bid Before BCD Announcement

The extension applies to projects for which bids were finalized before March 9, 2021


The Ministry of New and Renewable Energy (MNRE) has extended the timeline for the completion of solar and wind-solar hybrid projects for which bids were finalized before March 9, 2021. The extension is provided until March 2024.

The Basic Customs Duty on the import of solar modules and cells came into effect on April 1, 2022.

The ministry noted that many projects whose 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.

MNRE said that while the decision on bids finalized before the BCD announcement is pending, the extended commissioning dates of many projects have expired.

Considering this the ministry extended the commissioning date of solar and wind-solar hybrid projects for which bids were submitted before the announcement.

Recently, MNRE granted a timeline extension until September 30, 2024, for solar power projects (Tranche I and Tranche II) under Phase II of the Central Public Sector Undertaking (CPSU) program implemented by the Solar Energy Corporation of India. The extension would be granted to projects whose scheduled commissioning date is before September 30, 2024.

The MNRE also granted a timeline extension until September 30, 2024, to solar power projects (Tranche III) under Phase II of the CPSU program implemented by the Indian Renewable Energy Development Agency.

While the extensions come as a relief for most developers, they are very likely to have an adverse impact on India achieving the 450 GW target set for 2030, out of which solar accounts for 280 MW.

In order to achieve the set target, the country must install 27.5 GW of solar capacity annually.

According to Mercom India Research’s Q3 2022 India Solar Market Update report, India installed 10 GW of new solar capacity as of September 2022, which currently is not even at the halfway mark of what the country needs to install annually.

As the country strives to develop a solar ecosystem through implementing regulations like BCD, the ministry cannot ignore its short-term impact on solar projects.

Earlier, MNRE had said the imposition of BCD and hike in goods and services tax from 5% to 12% should be treated under ‘Change in Law’ events unless disallowed by specific provisions in the tender documents or contracts.

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