MNRE proposes shortening commissioning period for solar projects

The Ministry of New and Renewable Energy (MNRE) has proposed shortening the period for commissioning for solar power projects, to speed up the pace of solar capacity addition in view of the target of 100,000 MW of solar capacity to be achieved by 2022. But developers are unhappy with the suggestion maintaining the shortened deadline will put too much pressure on them.

The commissioning schedule of a solar project is currently 21 months from the date of execution of the power purchase agreement (PPA) for projects being set up within a solar park, and 24 months for projects of over 250 MW elsewhere.

“In case of projects inside solar parks where there are no major challenges to land possession and financial closure, a commissioning period of 15 months from the PPA is proposed, considering nine months for financial closure and another six months for construction activities,” says the MNRE’s internal memo. “In case of projects outside solar parks, on account of additional challenges in land possession and financial closure, a commissioning period of 18 months is proposed, considering 12 months for financial closure and another six for construction.”

“The extended timelines were a challenge to the timely achievement of the 100GW solar power target by 2022,” the memo adds.

An MNRE official acknowledged that the proposal had been made. “It has been proposed inside the ministry but the amendment to the guidelines will only be made by the power ministry after the getting the minister’s approval,” he said.

In end-July, the Directorate General of Trade Remedies (DGTR) imposed safeguard duty of 25% on imported solar panels and modules for a period of one year, followed by 20% for the next six months, and 15% for another six. This has solar developers greatly worried, as it will increase solar tariffs and make competing with thermal power difficult. More than 90% of solar panels and modules used in Indian projects are imported from China and Malaysia. However, the safeguard duty is yet to be implemented, as it has been challenged in the Orissa High Court whose decision is awaited.

Against the target of 100,000 MW of solar capacity by 2022, India (by end-July) had installed 23,115 MW.