Petition to lower solar PPA tariff in India rejected

Share on facebook
Share on twitter
Share on linkedin
Share on reddit
Share on email

The petition made by state-owned electricity distributor Gujarat Urja Vikas Nigam Ltd. (GUVNL) to cut the rate it pays for energy from 88 solar projects by 28% has been rejected.

The action was brought before the Gujarat Electricity Regulatory Commission (GERC) after GUVNL claimed solar developers were making “windfall profits” from overgenerous solar tariffs. Almost half of India's solar capacity is installed in the state of Gujarat.

There were 80 respondents to the petition including Moserbaer Energy & Development, Azure Power, Solitaire Energies and Welspun.

The petition sought to overturn the orders and taxation laid out in power purchase agreements (PPAs) by the Commission on 29 January 2010, and revise the “previous approved capital cost” of INR16.50 crores/MW (US$2.59 million).

An initial hearing took place on 23 July and another on 5 August, where lawyers representing the companies said the petition was barred as developers were working under contract conditions laid out in PPAs, and the petition breached laws including the Electricity Act 2003.

James Abraham, managing director SunBorne Energy, one of the 80 respondents to the petition who previously told PV Tech the case was a “waste of time”, said the decision sent a positive investment signal calling the verdict “clear and complete”, adding “confidence in contract sanctity and regulatory powers [are] restored, every element put to rest”.

Abraham continued that any questions people had six months ago not just for solar but for any sector dealing with government contracts for infrastructure should be laid to rest. However his concern is, “the shock from when this first launched, people are still recovering and making alternative investments, it will take a lot of time to recover”.

“The government went out of its way to point out fact by fact the petition is wrong; it underlines the sanctity of contracts, which is excellent,” added Abraham.

The ruling is also positive for India’s national solar programme, the Jawaharlal Nehru National Solar Mission (JNNSM), as it begins its second phase of entering into PPAs.

“The petition ruling will help restore faith for people entering into contracts with the federal government,” Abraham told PV Tech. “The last three to four months have been very bad with this – we are starving for funds. No solar companies have been completely pushed out, yet, frankly we just lost a lot of momentum, it will take another three to six months to see how damaging this has been, and the recovery could take longer.”

At the time of writing GUVNL did not respond to phone calls or e-mails for comment.

Solar consultant specialists, Bridge to India previously called for the petition to be overruled.

Energy consultant from RESolve, Madhavan Nampoothiri told PV Tech the petition order “definitely helps a lot in restoring the confidence in the sector. If the ruling had gone the other way, the regulatory risk would have become so high that lenders would have stopped lending and investors would have reconsidered their decision to invest in Indian solar sector”. 

Nampoothiri also said investors and developers in Indian solar, foreign and domestic “would heave a sigh of relief that the tariff at which the PPA was signed will not be lowered thereby removing the danger of lowered returns from their projects”.

28 September 2021
Solar Solutions International is the largest trade show for solar energy in Northwest Europe. Now the solar market has grown up, it's time for the next step. Solar Solutions International displays more than 500 innovations and over 100 practical seminars concerning the latest in energy storage, smart products, and an ever evolving array of solar panels. As an exclusively B2B trade show, Solar Solutions International offers both exhibitors and visitors the chance to network at the highest level. Duurzaam Verwarmd, the largest trade show for sustainable HVAC technology in the Benelux, is held simultaneously. This way your one visit gets you up to date with all of the developments in both sustainable energy and heating.
6 October 2021
Intersolar Europe is the world’s leading exhibition for the solar industry. It takes place as part of The smarter E Europe – the continent’s largest platform for the energy industry. Under the motto “Connecting solar business,” manufacturers, suppliers, distributors, service providers and project planners and developers from around the world meet in Munich every year to discuss the latest developments and trends, explore innovations firsthand and meet potential new customers.
6 October 2021
The future is bright for a new era of US solar and storage, and the 8th annual Solar & Storage Finance Summit will provide opportunities to discuss solutions to the industry’s challenges and provide a networking platform designed to bring together the top minds in the industry to do business. With a mix of high-level, informative presentations and panels, a stellar cast of speakers and audience members with deal-making capacity, the 2021 edition of the event will be a sell-out success.
18 October 2021
Intersolar South America, South America’s largest exhibition and conference for the solar industry, takes place at the Expo Center Norte in São Paulo, Brazil on October 18–20, 2021, and has a focus on the areas of photovoltaics, PV production and solar thermal technologies. At the accompanying Intersolar South America Conference, renowned experts shed light on hot topics in the solar industry.
19 October 2021
This year’s EV World Congress will hold a special role, not only as the first live EverythingEV event in over a year – a chance to renew your connections and re-engage with the EV sector face to face – but also as a chance to share insight and inspiration as world starts to look towards move on post COVID towards hitting ambitious decarbonisation goals in 2030 and beyond. As ever, we will be bringing world leading organisations, cities, and technology providers to the UK to inspire EV innovators, and delve into the challenges facing the sector as the UK looks to revolutionise road transport.
20 October 2021
Utility-scale solar is evolving, shaped by higher power modules and demand for increasingly lower levelised cost of electricity (LCOE). Those trends are also changing project requirements elsewhere, with inverters capable of delivering high power density and power capacity in strong demand. In this webinar, FIMER will detail how its innovative high-power, multi-MPPT string inverter and modular conversion solution can both meet those demands and transform the utility-scale solar sector for the better.

Read Next

September 24, 2021
Independent power producer Catalyze has acquired commercial and industrial (C&I) solar developer Sol Alliance, expanding its presence in the northeast of the US and taking on an 80MW project development pipeline in the process.
September 24, 2021
California Governor Gavin Newsom has signed a US$15 billion package to fund programmes to tackle drought and climate change in the state
PV Tech Premium
September 24, 2021
Concerns have been raised that new measures introduced by Spain’s government to limit windfall profits of renewable energy plants could dent investor confidence and impact the stability of the country’s solar sector.
September 24, 2021
DNV-owned solar monitoring firm GreenPowerMonitor is to integrate Alteso’s solar analytics tech platform into its offering after striking a deal to acquire it.
September 23, 2021
A project that bids to combine up to 20GW of solar PV with the world’s largest energy storage battery and a 4,200km-long subsea power cable has moved a step forward after Indonesian authorities greenlit its proposed transmission cable route.
September 23, 2021
US national residential and C&I solar plant performance assessment company Omnidian has completed a US$33 million Series B raise.

Subscribe to Newsletter

Upcoming Events

Solar Media Events
October 6, 2021
Solar Media Events
October 19, 2021
Solar Media Events
December 1, 2021