RERC Grants Compensation To Solar Firm Over Change Of Law

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The Rajasthan Electricity Regulatory Commission (RERC), in its latest order, directed the Solar Energy Corporation of India (SECI) to pay compensation to Palimarwar Solar House Private Limited, a solar developer over ‘Change of Law’ events. 

These change of law events were related to the increase in the Customs Duty of imported solar inverters and the levy of collection of countervailing duty (CVD) and anti-dumping duty on supplies of solar module glasses. The solar company had two solar energy plants of 20 MW each in the Barmer district of Rajasthan.  

The petitioner told the RERC that the Union government in 2021 increased the customs duty on solar inverters from 5 percent to 20 percent, which led to an additional customs duty of Rs 74.66 lakh. 

It also added that due to the levy of CVD/anti-dumping duty on solar tempered glass, it suffered an additional increased cost of Rs 10.63 lakh. Palimarwar Solar said that in total, due to the two actions, its overall price increase touched Rs 85.30 lakh. 

Meanwhile, The Commission accepted the solar firm’s plea and approved compensation for the company due to the increased costs. “The Commission allows a claim of Rs 74,66,936/- as reconciled and unanimously agreed by all the parties, to the petitioner on account of change in law,” the RERC order said. 

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It also added, “Carrying cost on the amount paid towards Change in Law is payable at the rate at which the Petitioner have actually taken long term capital loan for financing the project from the lenders and financial institutions or the rate of interest on working capital as per applicable RERC Tariff Regulations or the late payment surcharge rate as per PPA, whichever is the lowest.” 

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The order also said that the liability of SECI/RUVNL for “Monthly Annuity Payments” should start from 60th day from the date of this order. “In case of delay in the Monthly Annuity Payment beyond the 60th (sixtieth) day, late payment surcharge for the delayed period corresponding to each such delayed Monthly Annuity Payment(s) shall be payable as per respective PPAs/PSAs,” the order said.