RE Policy updates- Jan 2020

MNRE notifies list of Insurance Providers for Solar Power Plants

  • To insure and protect the interest of solar energy industry stakeholders, MNRE has released a list of insurers offering products covering various risks associated with the solar power plants. 
  • The insurance providers include IFFCO Tokio GICL, HDFC Ergo GICL, The New India Assurance Co. Ltd., ICICI Lombard GICL, and Cholamandalam MS GICL offering various products for the solar plants.
  • The various policies offered by the insurers include photovoltaic sales policy, solar panel warranty insurance, photovoltaic buyers policy, solar panel warranty insurance, new India solar energy insurance policy, Chola solar plant protect policy and solar energy shortfall insurance policy, among others.
  • The products offered cover various risks associated with the life cycle of a solar energy plant such as contractual liabilities of PV module manufacturers’ arising out of the performance and product warranty offered to buyers, cover to PV module buyers’ if manufacturer becomes insolvent, underperformance of solar modules on account of performance degradation of panel insured below the performance warranty due to faulty manufacturing, material defects and material ageing beyond normal wear and tear, and degradation
  • The policies also cover – energy shortfall due to unintentional error in calculation of target production, defect in insured energy installation, shortfall in deemed energy production due to lack of adequate solar irradiation and others as well. The policy indemnifies the insured against costs and expenses necessary to fulfil its obligation under the warranty.

MNRE extends timelines for self-certification of inverters  

  • To assure quality components in solar projects, the government had mandated that laboratories must conduct the tests as per Bureau of Indian Standards (BIS) and passed the order regarding the same on 5th September’2017
  • Due to issues like capacity, test fee and the test labs availability, solar industry sought more time for the compliance of the above order.
  • Government has considered the same and has allowed self-certification for inverters till 30th June 2020 from earlier deadline of 31st December 2019.
  • However self-certification is allowed provided manufacturers have valid International Electrotechnical Commission (IEC) accreditation and test reports from international test labs
  • Prior to this, the deadline was extended from 31st December 2018 to 30th June 2019 than to 30th September 2019 and further till 31st December 2019. Hence this is the 4th time extension government has been provided.

GERC, Second Amendment in Net Metering Rooftop Solar PV Grid Interactive Systems

  • New definition clause of Micro, Small and Medium (Manufacturing) Enterprise or MSME (Manufacturing) has been inserted.
  • In original regulation Discom can provide net metering to consumers only for 65% of the cumulative capacity at any distribution transformer. However now the provision of 65% has been removed and the cumulative capacity has been allowed equal to capacity of the distribution transformer.
  • The maximum Rooftop Solar PV System capacity to be installed at any Eligible Consumer’s premises shall be upto a maximum of 50% of consumer’s sanctioned load/contract demand.
  • In case of Residential and MSME Consumers the Rooftop Solar PV System capacity shall be irrespective of their sanctioned load/contract demand.
  • Surplus Energy generated shall be bought by Discom at Rs. 2.25 /unit for residential and government consumers. Rs. 1.75 /unit for C&I and MSME consumers not registered under REC mechanism and Rs. 1.50 /unit for C&I consumers registered under REC mechanism. Earlier this energy was bought by Discom at APPC, which is determined by Regulatory Commission from time to time.

UPERC Issues Clarification on Banked Energy from Renewable Projects

  • UPPCL has raised objection that provision of withdrawal of banked power from renewable sources (except Small Hydro and Municipal Solid Waste) in two subsequent quarters which is being banked during a quarter is too flexible and will severely effect power purchase cost.
  •  UPPCL requested that the power banked in the month should be adjusted during the same month along with TOD slots.
  • Commission clarifies that withdrawal of banked energy was allowed in two subsequent quarters keeping sugar industry in mind as their crushing season overlaps 2 financial year. If banked energy is kept limited to FY, then the banked energy would not be available for sugar industry in month of April (sugar crushing season).
  • UPERC has said that it has not even one year since the regulation has come into effect hence, in the due course UPPCL should provide more data to substantiate its concern and if true UPERC will look into the matter again.

Azure pleads for tariff revision due to introduction of implementation of Safeguard Duty

  • Azure filed petition in CERC for increase in project cost due to implementation of safeguard duty under clause of “Change in law” clause and reimburse the same.
  • CERC directs SECI to pay the additional amount of project cost (after providing proofs)
  • SECI is eligible to claim the same from the Discoms on ‘back to back’ basis.
  • The Claim shall be paid within sixty days of the date of this Order or from the date of submission of claims by the Petitioner whichever is later failing which it will attract late payment surcharge as provided under PPAs/PSAs.
  • Alternatively, Azure and SECI can mutually agree to a mechanism for payment of such compensation on annuity basis spread over the period of the PPA and as a percentage of the tariff agreed in the PPAs.
  • CERC has quashed the claim regarding separate ‘Interest on Working Capital/Return of Equity’/’Carrying Cost’

Extension of validity of Renewable Energy Certificates (RECs) due to expire between November, 2019 and March, 2020 till 31st March 2020.

  • 34,714 Solar REC and 1,91,595 Non solar RECs ( Total – 226, 309 RECs) which are expired or would be expired from November ’19 till March 2020.
  • CERC has passed an order that these RECs which have expired/are due to expire between 1st November, 2019 and 31st March 2020 shall remain valid up to 31st March, 2020.

Phase II of the Grid Connected Rooftop Solar (RTS) Programme_ Clarification

  • Phase – II of grid connected rooftop solar programme is only for the residential sector.
  • Central Financial Assistance (CFA) is provided @ 40 % of the benchmark cost or the cost discovered through the transparent bidding by the implementing agency, whichever is lower for rooftop systems upto 3 kW capacity.
  • For system capacity beyond 3 kW and upto 10 kW CFA is provided at 20 % of benchmark cost or the cost discovered through transparent bidding.
  • For Group Housing Societies/Residential Welfare Associations (GHS/RA W), CFA will be limited to 20% for RTS plants for supply of power to common facilities.
  • The capacity eligible for CFA for GHS/RAW will be limited to 10 kW per house with maximum total capacity upto 500 kWp inclusive of RTS put in individual houses in the GHS/RWA.
  • Discoms or its authorised agency shall invite EOI for empanelment of agencies for supply, installation, testing & commissioning of RTS system in residential premises.
  • To ensure quality and post installation services only manufacturers of solar panels and system integrators fulfilling pre-determined technical and financial criteria would be allowed to participate in the bidding process. The selected bidders shall follow the quality control orders and standards for all components of RTS system and its installation procedure, if any, issued by MNRE from time to time.