MNRE Guidelines For Off-grid Solar Power Plants in RESCO Mode

The Ministry for New and Renewable Energy (MNRE) has finally issued the guidelines for the implementation of off-grid solar power packs/ plants installed in RESCO mode and through model PPA.

The newly issued guidelines follow the ministry’s order in April last year that extended Off-grid and Decentralized Solar PV Applications Programme –Phase III till March 31, 2021, and mandated off-grid solar power packs to be installed in RESCO mode only for which separate guidelines would be issued later on.

Energy access is key for our social and economic development, and energy access programs must be accelerated in rural areas where conventional grid is yet to reach or reliability of grid supply is not up to the desired level. Off grid solar systems, working independently or in tandem with the grid will be a viable solution for increasing energy access in these areas, says the ministry.

Under the Phase III of Off-grid and Decentralized Solar PV Applications Programme of the MNRE, off-grid solar power plants of individual size up to 25 kWp can be installed in areas where grid power has not reached or is not reliable. Such plants are mainly aimed at providing electricity to Government schools, hostels, panchayats, police stations and other public service institutions.

MNRE has stated that to ensure proper repair and maintenance of the off-grid solar power plants, they are to be installed under the RESCO model. The plants would be eligible for CFA at 90% of the benchmark cost. This CFA provided by the MNRE would significantly reduce the financial burden, which otherwise results in very high tariff in per unit terms due to smaller size of plants and requirement of storage batteries.

A summary of some of the requirements mandated by the ministry’s new guidelines is as follows:

• For Isolated Off-grid solar plants: To bring down the cost by optimising the size of the required solar power plant, only energy efficient equipment e.g. LED lights, BLDC fans, 5-star rated appliances, etc. are allowed to be used by the beneficiary. Daily energy requirement to be calculated based on load and running hours. Since DC appliances are more efficient, the plants should be designed for using them as much as possible, in which case applicable LVDC standards specified by BIS will be followed. Additionally, efficiency of equipment like charge controller, inverter and distribution losses in the wiring should also be accounted properly for calculating solar PV and battery capacity. Solar PV capacity and battery back-up sufficient for supplying daily guaranteed energy are to be kept available, etc.
• For Grid connected system: Off-grid solar PV system is to be designed only for essential/emergency load. Energy efficient equipment e.g. LED lights, BLDC fans, 5-star rated appliances, etc. must be used for such essential/emergency load and should be supplied through separate electric circuits. Since DC appliances are more efficient, the plants should be designed for using them as much as possible, in which case applicable LVDC standards specified by BIS will be followed. Daily energy requirement to be calculated based on load and running hours. Also, MPPT hybrid inverter shall be used, etc.
• Implementation Models and Financial Assistance: Under RESCO model, it is proposed that the vendor will install and operate the solar power plant of capacity up to 10 kWp for at least 10 years and solar PV plants of capacity above 10 kWp for at least 15 years. Solar power plants will be installed by the RESCO on BOOT basis. MNRE CFA of 90% of the benchmark cost will be paid upfront on successful commissioning of plant. The MNRE benchmark cost covers cost of complete system, transportation of material at site, installation, commissioning, insurance and AMC for five years.
  The solar power plant shall be designed to supply Daily Minimum Guaranteed Energy (DMGE) to the beneficiary at the delivery point. The beneficiary will make payment to the RESCO according to the DMGE. The company will undertake to provide the services for the specified period and submit bank guarantee for an amount equivalent to 40% of the eligible MNRE’s CFA. For project of capacity more than 10 kWp and up to 25 kWp (15 years project life), 40% of bank guarantee will be released at the end of five years or first replacement of batteries, whichever is later and balance 60% of bank guarantee will be released at the end of 10 years or second replacement of batteries, whichever is later.
• Tariff Estimation: The daily minimum guaranteed solar power would be 10 kWh. With battery back-up of 7.2 VAh per Wp total battery requirement would be 28.8 kWh. The MNRE benchmark cost has been considered for arriving total cost of project. The developer will arrange loan @ 12% for investment in the project. The levelized tariff discovered is Rs. 5.96 per kWh.

The ministry has also specified guidelines with regards to submission of proposals, selection of RESCO, power purchase agreements (PPA), monitoring, implementing agencies’ responsibilities, and technical requirements.

Additionally, all project should be installed and commissioned by the successful RESCO within 3 months from placement of award by implementing agency. Maximum extension of 3 months can be provided to RESCO, provided the reasons for delay are beyond the control of the RESCO. Any delay beyond 3 months will result in cancellation of award, said MNRE.

Lastly, the ministry has clearly stated that these guidelines must be read with the Off-grid and Decentralized Solar PV Applications Programme Phase-III Guidelines issued by Ministry in August 2018. In case of any ambiguity in interpretation of any of the provisions of these guidelines, the decision of the Ministry will be final.