DISPA recommends keeping C&I projects outside ambit of ALMM List

In response to a petition filed by the Distributed Solar Power Association (DiSPA), the Delhi High-Court has sought clarification from the Ministry of New and Renewable Energy (MNRE), on the provisions they have made to protect ongoing projects, which could be negatively impacted with the extension of ALMM to projects under open access and net metering.

Developers are hopeful that the Ministry will delay the implementation of the amendment by a minimum of 1 year, to protect ongoing projects.

Pinaki Bhattacharyya, President, DiSPA, said, “Over 4 GW of open access and rooftop projects under various stages of development, can get stuck due to this ALMM notification which will have a significant financial impact on developers and consumers. This will be an additional burden with BCD (kicking in from 1st April) and GST adversely impacting solar projects. The government must understand that the developers are already suffering from issues such as supply chain delays, shortage of raw material and such sudden amendments only lead to an artificial increase in prices.” Incidentally, the government has recommended reducing GST for all related solar products to a uniform 5%, a decision that is likely to be come up for consideration at the next GST council meeting.

“We are still hopeful that MNRE, which understands the seriousness of the situation, will offer us a solution that is in the larger interest of the development of the renewable energy ecosystem.” DiSPA is a registered and prominent association of renewable energy developers and IPPs operating in the field of renewable energy from solar, wind and wind solar hybrid for Commercial & Industrial (C&I) segment.

On 13 January, 2022, the MNRE reportedly amended the Approved Models and Manufacturers (ALMM) of Solar Photovoltaic Modules Order, 2019, to include open access and net metering projects. This amendment has not been received well by developers of solar installations and industry associations, who approached MNRE asking for clarity on the application of the order to private projects developed for C&I consumers. Developers wanted to know whether adequate time will be provided for the implementation of such amendment, so that ongoing projects are not impacted.

In the absence of a response from the Ministry, developers approached the Delhi High Court for clarification. Surprisingly, the counsel appearing on behalf of the Ministry offered no clarification on the impact on ongoing projects.

Developers would like the Ministry to keep C&I projects under open access and net metering outside the ambit of this order, because such projects are neither government funded nor subsidized. The government, on the other hand had contended, while adding these to the ALMM ambit that by benefiting from the transmission infrastructure and other fee rebates, these were also ‘subsidised’.

The moot issue however is whether the present supply of solar modules is enough to cater to government funded projects. Any shortage in supply will affect the development of solar energy projects. DiSPA also claims that it is also a matter of concern that not all module manufacturers pass reliability parameters and they do not make modules that can be used in commercial projects.

The next date of hearing is on March 29, 2022, when the High Court, will hear the matter and announce its decision.

Caught between its commitments to domestic manufacturers and the need to ensure low prices, we don’t expect the government to take a stand based on quality at least, for now. If at all, the only issue it might consider is availability, where domestic manufacturers have been vociferous in rubbishing claims, going as far as to say that present capacity utilisation is barely 30%.