Policy Highlights for Solar and Other Renewables From February 2020
Coronavirus and basic customs duty were new concerns for the industry during the month
March 2, 2020
The month of February witnessed a slew of announcements, both at the center and the state level. The two most critical policy announcements were related to Coronavirus and the basic customs duty.
Central Government Policies
In February, the Ministry of New and Renewable Energy (MNRE) designated National Thermal Power Corporation (NTPC) as the renewable energy implementing agency to facilitate the application of connectivity and long-term access in the interstate transmission system network. According to the Central Electricity Regulatory Commission (CERC), a renewable energy implementing agency is a company or an entity designated by the central or state government to act as an intermediary procurer to select and buy power from renewable energy generating stations and sell it to one or more distribution licensees.
Amid the increasing doubt on the supply chains due to the spread of Coronavirus in China, the Ministry of Finance (Department of Expenditure Procurement Policy Division) issued a clarification that Coronavirus will be covered in the force majeure clause (FMC) and should be considered as a case of natural calamity. Further, the ministry has stated that this clause can be invoked wherever appropriate.
With the ongoing confusion in the solar industry over the imposition of basic customs duty, MNRE issued a notification asking solar PV manufacturers and associations to submit a list of machinery and capital goods which they would like to be included in Basic Customs Duty (BCD) exemption list. The MNRE consulted with the Ministry of Finance over the issue of exemption of BCD on the import of capital goods required for setting up manufacturing units for manufacturing solar cells, modules, wafers, ingots, and polysilicon.
Though distribution companies can take the help of state nodal agencies for implementing the second phase of the rooftop solar program, they have to be at the forefront of its implementation process. This was the crux of the latest suggestions from the MNRE, which also said that the maximum time required for the entire process of rooftop solar installation should be between 2.5-5 months after the consumer submits his request.
In another development, MNRE asked states to prepare innovative business models for implementing Pradhan Mantri-Kisan Urja Suraksha Evan Utthan Mahaabhiyan (PM-KUSUM) program. Citing the example of business models for the solarization of pumps adopted in Haryana, Gujarat, and Maharashtra, the MNRE has asked other states to follow suit.
In February, MNRE also issued a clarification regarding the compulsory requirements of registration for solar manufacturers under the Approved List of Models and Manufacturers (ALMM). The clarification deals with the definition of the model, application fee, and provisions for manufacturers currently exempted from BIS certification for ALMM application purposes. The clarification deals with the definition of the model, application fee, and provisions for manufacturers currently exempted from BIS certification for ALMM application purposes.
State Government Policies
The Rajasthan Electricity Regulatory Commission (RERC) set the pre-fixed levelized tariff for Component-A of the KUSUM program at ₹3.14 (~$0.044)/kWh. The Commission added that the set tariff adequately reflects the higher cost for small-sized projects.
The Kerala State Electricity Regulatory Commission (KSERC) issued new regulations called the ‘Kerala State Electricity Regulatory Commission (Renewable Energy and Net Metering) Regulations, 2020’ in which the state has directed the distribution licensees to constitute an in-house renewable energy cell to promote renewable deployment in the state within one month.
The Gujarat Electricity Regulatory Commission (GERC) invited public opinion on a draft paper discussing issues in establishing tariff for solar power procurement by distribution licensees. The last date for sending comments and suggestions is March 4, 2020. The Commission released the discussion paper for feedback to initiate the regulatory process for setting the solar power procurement tariff for the financial year.
The Tamil Nadu Electricity Regulatory Commission (TNERC) issued a consultative paper for procuring solar power by distribution licensees and has asked all the stakeholders to submit their comments and suggestions by March 13, 2020. The report states that the total capacity of renewable power in the state is 14.14 GW.
The GERC invited public opinion on a draft paper discussing issues while determining tariffs for procuring power from wind projects. The Commission released the discussion paper for feedback to initiate the regulatory process for setting the wind power procurement tariff for the financial year.