SECI’s 1.2 GW Solar Tender_ Tariff Revision Allowed in Case of Duty Under Change in Law

The Solar Electricity Corporation of India (SECI) has amended the power purchase and sale agreement (PPA and PSA) for its 1,200 MW solar tender, adding another point to the existing ‘change in law’ clause.

The additional clause states that in case of a change in the law on account of anti-dumping duty or safeguard duty or customs duty on solar photovoltaic (PV) modules, the solar power developer will be entitled to either an increase or decrease in the tariff.

This increase or decrease in tariff will be for an amount equivalent to ₹0.05 (~$0.00070)/kWh for every increase or decrease of ₹100,000 (~$1,402) of impact on the cost of solar PV modules.

However, this will come into effect only after the solar developer produces relevant documents as evidence. These documents include the bill of landing, bill of entry and duty paid at the airport of arrival, lorry receipt, goods receipt, and insurance papers, including the project site.


This increase or decrease in tariff due to this change in the cost of PV modules will be limited up to 150% of the solar project capacity allocated to the project developer.

SECI issued a detailed request for selection documents to set up 1,200 MW of ISTS connected solar projects in January 2020. The tender was announced in December 2019, but the details were not available then. The tender for 1.2 GW of solar projects was floated under tranche VIII of the ISTS program. A tariff cap of ₹2.78 (~$0.03)/kWh has been set for the tender.

This is the first time an amendment is made in the PPA and PSA for a tender, and the move comes when the safeguard duty of 15% on solar modules and cells is coming to an end in July 2020. It came into force on July 30, 2018.

Meanwhile, the government proposed a basic customs duty of 20% on imported solar cells and modules that led to a lot of confusion in the industry. However, an official at the Ministry of Finance clarified that the effective duty will be nil for now as an exemption is currently in place.

 

Image credit: Praveensustain [CC BY-SA]