The Ministry of New and Renewable Energy (MNRE) has issued an order stating that project developers will be penalized for the utilization of imported solar modules to develop projects under the Domestic Content Requirement (DCR) category.

In its order, the MNRE stated, “The government of India is encouraging domestic manufacturers of solar cells and modules by way of DCR policy wherever permitted by the World Trade Organization (WTO).”

The order comes amid apprehensions that the DCR policy may be misused by project developers by way of mislabeling or misclassification of imported solar modules.

In India, DCR category projects were implemented to provide a guaranteed market for local solar component manufacturers. Mercom had previously reported that the DCR policy was always at risk of running into conflict with WTO rules, but the government kept pushing it to protect the fledgling solar industry.

The MNRE has come up with a stringent plan of action to curb such discrepancies. A criminal case will be filed under the Indian Penal Code (IPC) 420 and other related sections in case of a violation. The project developer will then be blacklisted for a decade, bank guarantees will be encashed and strict disciplinary action will be taken against the involved government agency officials.

An MNRE official aware of the development told Mercom, “Yes, we are following WTO norms. According to the WTO norms, we can also do certain DCR projects. If DCR projects are being developed, there should be a guarantee that specific domestic modules and panels are used. This order will provide that guarantee. Even the government officials have been accounted for, no one can think of getting away scot-free.”

“If you see, in coming in line with the WTO norms, we (MNRE) have also issued an order stating that the modules, panels can be sourced from anywhere for operation and maintenance of DCR projects. This order was required,” added the official.

In January 2018, Mercom had reported about MNRE issuing an advisory regarding the procurement of modules for the operation and maintenance (O&M) of the desired Capacity Utilization Factor (CUF) of solar projects developed under the DCR category. In its letter, the MNRE had said that the projects built under the DCR category can replace defective cells/modules in the open category (can be imported).