Solar developers heave a sigh of relief after Maharashtra power regulator’s order

pollution on solar panel

Maharashtra power regulator’s order passed on Friday greatly relieved solar developers who won projects before the imposition of safeguard duty on solar panels and modules last year. The order maintained that such duty amounted to a “change of law” and that developers should be adequately compensated for it reports ET.

Last year in May MSEDCL conducted a 1000 MW solar auction in which Tata Power bagged 150 MW, Acme Solar won 250 MW and Adani Green Energy 200 MW. Tata Power and ACME quoted a tariff of Rs 2.72 per unit, while Adani Green Energy sought Rs 2.71 per unit.

However, after the imposition of safeguard duty on July 30, 2018 all the three companies filed petitions before MERC pursuing it acknowledge that the imposition was indeed a change of law, and fix the compensation they should receive. The solar developers then noted that in solar projects most of the panels and modules used are imported and hence the safeguard duty would significantly raise their input costs.

The publication notes MERC have declined to fix any compensation or increase in tariff, noting that “impact of the safeguard duty is dependent upon the period in which solar panel/modules are imported from China PR or Malaysia. From the submissions of the petitioners it is observed that they are in the process of importing the solar panels and hence exact impact of change in law is not quantified.”

The safeguard duty is 25% for a year, followed by 20% for six months and 15% for another six months.

The commission also declined request for extension financial closure and commissioning deadline by the petitioners.

The order said “Power producers shall approach the Commission at later date for determination of increase in cost or/and revenue expenditure on account of imposition of safeguard duty, if any and the mode of recovery of the same.”

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