CERC Gives Relief to Solar Project Developers by Accepting GST as ‘Change in Law’

The Ministry of New and Renewable Energy (MNRE) has issued a memorandum for the implementation of public procurement in renewable energy sector giving preference to ‘Make in India’ products.

This is in response to the central government’s order, issued by the Department of Industrial Policy and Promotion (DIPP) to promote manufacturing and production of goods and services in India in order to improve income and employment in the country.

The order applies to all ministries/departments, attached or subordinate offices and autonomous bodies controlled by the government of India also including government companies as defined under the Companies Act.

For the grid connected solar power projects developed by central ministries, departments, and central public sector undertaking (PSU), the order prescribes preference to be given to domestically manufactured solar PV modules and other components such as inverters.



Of this, solar PV modules have to be 100 percent locally manufactured and inverters have to be at least 40 percent locally manufactured.

Under the decentralised solar power category, the requirement of local content in solar street lights, solar home lighting systems, solar power packs/micro grid, solar water pumps, inverters, batteries, and any other solar PV balance of system is 70 percent.

For wind projects developed by central ministries, departments, and central public sector undertaking (PSU), the order prescribes preference to be given to domestically manufactured products.  Further, minimum percentage of local content required for gear box, blades, rotor, generator, tower, hub, parts of controller, bearings, yaw machine components, nacelle and hub is 80 percent. Besides hub and nacelle assembly/manufacturing facility should be in India.

To verify the local content, the local supplier at the time of bidding has to provide self-certification stating that the products being offered meet the minimum local content.

In case the value of procurement is more than ₹100 million (~$1.39 million), the local supplier must provide a certificate from the statutory auditor or cost auditor of the company or from a practicing cost accountant or chartered accountant giving the percentage of local content.

Products procured for research and development or demonstration purposes will be exempt from this order.

Recently, MNRE has issued a memorandum concerning the importance of following BIS certification when it comes to quality of solar modules.  According to the memorandum, “The lenders involved in financing solar PV power projects must insist for BIS certification regarding quality of solar modules and not whether the supply of solar modules is from the Bloomberg Tier-I List.”