Time Period to Set Up Solar Projects Extended | CORPORATE ETHOS

Time Period to Set Up Solar Projects Extended

By: | June 23, 2018

June 23: Until now, the maximum time given for a developer to establish a solar energy project was 15 months. Latest reports say that the government have decided to increase the 15-month time period to 2 years. This, in turn, is likely to result in competitive tariffs.

According to a report, on June 14, 2018, the Ministry of Power had modified the strategies in regard to the tariff-based competitive bidding process for procurement of power grid connected solar PV power projects. The amendments made were in association with the extension of the time period provided for establishing solar projects, it said.

As per the latest amendments, the developers get a time span of 24 months from the date of signing the Power Purchase Agreement to establish solar projects of 250 MW. The time span for commissioning projects of capacities below 250 MW is increased to 21 months from the earlier time frame of 13 months after the signing the PPA.

The amended rules will not be relevant for those projects which are already bid out or for the ones which are under any stages of execution. The state authorities are also expected to take up similar timelines for all the upcoming projects.

With the new amendments, the time period to achieve financial closure also increases. The 7 month time period is increased to 1 year which enables the solar power generators to take a year to gain funds after signing the PPA.

The upgraded rules give a new provision for the developers, which is if for any reason, the time period for achieving financial closure needs to be kept smaller than that provided in the guidelines, the buyer, with whom solar developer ink PPA, can do the same.

Apart from these, the amended rules have stretched the deadline of 7 months for 100 per cent land acquisition to 1 year.

Solar Power Developers Association (SPDA), in a submission to the Ministry of New and Renewable Energy had pointed out that the delay in land acquisition and authorized approval for land acquisition had held back the developers from establishing the solar projects on time. Apart from this, the developers also face issues like delay in supply of equipment including electric system. By year 2022, India targets to establish 100 GW solar power capabilities in the country.