MNRE Amends Guidelines for Selection of Solar Park Developers

The Ministry of New and Renewable Energy (MNRE) has amended the guidelines for the selection of solar power park developers (SPPDs) through tariff-based competitive bidding process. The MNRE has amended the guidelines to bring more transparency in the selection of SPPDs for the development of solar parks.

Earlier an SPPD could be selected under one of three modes, Mode 1, 2 or 3. Now, the MNRE has also provided for Mode 4, 5, and 6.

Under the amendment, the MNRE has also done away with the obligation that the state government in which the solar park is being developed must agree to buy a minimum 20 percent of power produced in the park through its distribution companies (DISCOMs). Earlier, MNRE had made it mandatory for state DISCOMs to procure 20 percent of energy generated from solar parks located in the state.

According to MNRE, under Mode 4A, if land is being made available by state government or any government agency, the SPPD will be selected on development and operation and maintenance (O&M) charges. The SPPD can again lease or sell the land to solar project developer (SPDs). Under Mode 4B, if land is provided by SPPD, then it will be selected based on the quoted price for developed land/MW and O&M charges.

In case of exercise of Mode 4A or 4B, central financial assistance (CFA) of ₹1.2 million/MW will be provided to SPPD, once letters of award (LoAs) for solar projects in the park are issued. If the SPPD cannot complete the approved solar park within 18 months of in-principle approval, the approval will be cancelled, and grid-connectivity awarded to another SPPD.

If central public-sector undertakings (CPSUs) like Solar Energy Corporation of India (SECI), National Thermal Power Corporation (NTPC), want to develop solar parks, they can do so under Mode 5. Under Mode 5A, CPSUs having their own land can approach MNRE to set up solar park. CPSUs will develop the solar park either on their own or through an EPC contractor. In such parks, the CPSU cannot develop solar projects of its own. Under Mode 5B, CPSUs having their own land can also select a SPPD to develop the park based on development and O&M charges. Under Mode 5C, CPSUs can float a tender on behalf of a third party (land owner) to develop a solar park. In this case, SPPDs will have to quote park development and O&M charges.

SPPDs cannot bid for projects in their own solar parks, but under Mode 5B and 5C it has been made possible as they will not be the owners, but only facilitators.

MNRE has provided Mode 6 for those private entrepreneurs willing to develop solar parks without CFA. The private entrepreneurs will have to submit proposals along with detailed project report (DPR) and documents stating 100 percent land ownership. After scrutinizing DPR and documents, an in-principle approval will be provided to the entrepreneurs.

MNRE has specified that the minimum capacity of solar parks developed by entrepreneurs will be 100 MW, the only anomaly being hilly states and states with shortage of agricultural land where 50 MW solar parks are allowed. If the entrepreneur cannot complete the approved solar park within 18 months of in-principle approval, the approval will be cancelled. Only in case of unforeseeable circumstances,  will an extension be provided.