Wednesday, 23 March 2016


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BACKGROUND. National Solar Mission (“NSM”) was introduced in January 2010 and the initial target was 20,000 M.W. of Grid Connected Solar Power Systems (“GISPS”). The proposed capacity addition has now been revised to 1,00,000 MW and to that effect Central Government has now approved implementation of 5000 MW and issued guidelines under Batch IV Phase II (“Guidelines”).

IMPLEMENTING AGENCY. Solar Energy Corporation of India (“SECI”).
IMPLEMENTATION METHOD. E-bidding followed by Viability Gap Funding (“VGF”) to the successful Solar Power Developers (“SPD”s). Implementation will be through Build-Own-Operate (“BOO”) basis. 

EXCLUDED GISPS.  (I) Already commissioned GISPS; (ii) GISPS under construction or due for commissioning but covered under any other government schemes; and (iii) Enhancement and augmentation of existing GISPS.






Means a legal entity which, directly or indirectly, either SPD CONTROLS or WHICH CONTROLS SPD or IN COMMON CONTROL ALONG WITH THE SPD

As per Guidelines, 26% ownership is sufficient to have control. Purpose is to prevent rigging of bid process through related companies.


Means paid-up share capital (comprising of equity, compulsorily convertible preference shares and debentures) plus free reserves less revaluation reserves less intangible assets less miscellaneous  expenditures not written off and carry forward losses

Except when the SPD is a listed company, share premium will form an integral part of Equity provided it is realized in cash or cash equivalent.

Financial Closure

Means funds commitment from SPD’s internal resources or banks/financial institutions.

SPD’s financial comfort to execute the project

Group Company

Means company(ies) (i) in which a given SPD holds 10% or more share capital or otherwise has power to control management (ii) which hold 10% or more share capital in the given SPD or otherwise has power to control SPD’s management; (iii) stands with common control along the SPD through 10% shareholding or otherwise control of management.

This is to prevent economic conglomeration of projects within group entities and to ensure fair competition.

Inter-Connection/Metering/Delivery Point

Means point at 33kV or above where the power from SPD’s project is injected into the Pooling Substation.

Pooling sub-stations will be operated by government owned transmission companies as per State/Central grid codes. So this voltage requirements is as per grid code requirements.

Paid-Up Share Capital

Means share capital comprising of paid-up equity share capital, compulsorily convertible preference shares/debentures.

Will not include share premium.

Pooling Sub-Station

Means a point where projects of various SPDs connect to a common transmission system.


Project Commissioning

Means occurrence of the following (i) installation of rated equipment and (ii) flow of PV electricity in the Grid.



Since India is in the process of developing solar parks, this 5000 MW can be tendered in any of the following ways:
  • Tendering of the entire capacity only through solar park(s);
  • Tendering part capacity through solar park(s) and balance in outside/other areas; and
  • Tendering entire capacity in outside/other areas.

  • Budget. INR 5050.00 crores for 5000 MW. In case of savings from the budgeted amount, the capacity will be proportionately increased after accounting for grant.

  • Capacity Allocation. 1,250 MW per financial year commencing from 2015-16 to 2018-19.
  • Project Capacity. SECI will determine project capacity for each tender, however, in no case less than 10MW.

  • Method. Projects will be tendered through competitive e-bidding with reverse auction. SECI will select the projects after evaluating the minimum VGF (INR/MW) sought or tariff discounted. The Bidders at the time of bidding may opt for either "DCR Category" or "Open Category" or both the categories. They will need to submit separate Bids under both the categories.
  • Group Company/Affiliates. Only single application will be allowed from one bidder including its group companies and/or affiliates.
  • Processing Fees. SPDs will need to submit non-refundable processing fees of INR 2 Lakhs/3 Lakhs/10 Lakhs for project capacity up-to 20 MW/below 100 MW/above 100 MW respectively.
  • Bank Guarantees. The SPD will have to submit (i) earnest Money Deposit (EMD) of Rs. 10 Lakh / MW in the form of Bank Guarantee along with Request for Proposal and (ii) Performance Bank Guarantee (PBG) of Rs. 20 Lakh / MW at the time of PPA execution.
  • PPAs. Within a month of issuance of letter of intent, SECI will enter into Power Purchase Agreements (“PPAs”) with SPDs and there will be back to back Power Sale Agreement (“PSA”) with distribution companies/bulk consumers etc. SECI’s trading margin would be INR 0.07/kWh. Tariff to be paid by SECI to the SPDs will be determined by Ministry of New And Renewable Energy (“MNRE”) through empowered committee. PPAs will be with a validity of 25 years from COD.  
  • Capacity Utilization Factor (CUF). SPDs will be free to re-configure their plants, but SECI will be obligated to procure power only as per the agreed Capacity Utilization Factor (“CUF”). Revision of CUF will be allowed once within first year of commissioning. The CUF shall in no case be less than 17% over a year. SPDs shall maintain generation so as to achieve CUF* within -15% and + 10% of their declared value till the end of 10 years from CoD subject to the CUF remaining over minimum of 15% and within- 20% and +10% thereafter till the end of the PPA duration of 25 years. The CUF will be calculated every year from April 1 to March 31.
  • Excess Generation. Excess power generated will be bought at a notional support price of Rs. 3/- per kWh.
  • Financial Qualification. SPD should infuse Equity at the proportion of INR 1 Crore/MW. Of this infusion, 10% should be at the stage of PPA signing, 25% upon Financial Closure and balance before first disbursement of VGF or before COD. Equity can also be in the form of land with valuation reflecting in the registered land documents.
  • Technical Qualification. For technical qualification, please refer Annexure A to this write up.
  • Domestic Content Requirement (“DCR”). If DCR is specified for any bid, the solar cells and modules to be used by the selected SPD must both be made in India. In case of crystalline silicon technology, all process steps and quality control measures involved in the manufacture of the Solar Cells and Modules from P-type (or N-type) wafers till final assembly of the Solar Cells into Modules shall be performed at the works of PV manufacturers in India. The requisite P-type (or N-type) wafers and other raw materials can be imported. In case of Thin-film technologies, the entire Modules assembly comprising of Thin-film Solar Cells shall be manufactured in India. The starting substrate (without any   semiconductor   junction)   and   other   requisite raw materials can be imported.
  • Promoter Contribution And Shareholding. SPDs should provide a complete shareholding pattern during bid submission. Change in shareholding will not be permitted during response submission and PPA execution (except for listed companies). Controlling shareholding of 51% in the SPD needs to be maintained post COD at-least for a period of 1 (one) year (“Lock-in-Period”). Any change after that needs to be carried out under intimation to SECI. Change of shareholding will be permitted during the Lock-in-Period after SECI’s approval provided such change is within the group companies and without relinquishing management control.
  • Financial Closure. Financial closure needs to be achieved within 6 months from execution of PPA. Further, SPDs will also have to furnish documents establishing clear title/possession of the land. Projects outside solar parks will also need to furnish transmission/connectivity agreements with DISCOMs/STUs etc.
  • Commissioning And Delay Penalty. Selected projects needs to be commissioned within 12-13 months from PPA execution. In case of failure to achieve the scheduled commissioning, SECI shall encash the Performance Bank Guarantee (BG) in the following manner: (i) Delay up to 1 (one) month - 20% of the total PBG per day basis and proportionate to the Capacity not commissioned; (ii) Delay of between 1 (one) to 3 (three) months - SECI will encash remaining PBG per day basis and proportionate to the Capacity not commissioned and (iii)Delay over 3 (three) months – tariff reduction of INR 0.50/kWh per day. COD will be considered as the date 30 days subsequent to the actual date of commissioning of the project as declared relevant committee. The 25 year tenure of PPA and energy accounting shall commence from COD and any energy produced and flowing into grid before CoD shall not be at the cost of SECI.
  • Grant of VGF. VGF will be granted to an SPD based on its bid. For open category the VGF upper limit is INR 1 Crore and for domestic content requirement (“DCR”) category this is INR 1.25 Crores.

  • Fiscal Incentives. SPDs would be free to avail fiscal benefits like accelerated depreciation (“AD”), concessional customs/excise duties, tax holidays etc. applicable to the projects. However, a SPD cannot claim both AD and VGF together.

  • Disbursement of VGF. SECI will release 100% of the VGF on commissioning operational date (“COD”) on the full project capacity in exchange of a bank guarantee (“BG”) for an amount equivalent to 20% of the VGF. The BG commitment will stand reduced @ 5% each year. SECI can en-cash the BG if SPD (i) fails to operate the project; (ii) leaves the project idle for a year; (iii) fails to meet generation criteria.

  • Default Refund of VGF. The lifecycle of the projects would be 25 years from COD. If an SPD fails to generate any power continuously for any 1 (one) years within these 25 years, the VGF needs to be refunded as per the formulae given in the notification.

SPV Modules

SPV modules must qualify to the latest edition of any of the following IEC PV module qualification test or equivalent BIS standards

Crystalline Silicon Solar Cell Modules

IEC 612 15




Thin Film Modules

IEC 61646




Concentrator PV modules

IEC 62108




ln addition, SPV modules must qualify to IEC 61730 for safety qualification testing at 1000V DC or higher. The modules to be used in a highly corrosive atmosphere throughout, their lifetime must qualify to IEC 61701

Power Conditioners; Inverters

The Power Conditioners/Inverters  of the SPV power plants conform to the latest edition of IEC/ equivalent BIS Standards as specified below:

Efficiency Measurements

IEC 61683




Environmental Testing

IEC 60.068 -2/ JEC 62093




Electromagnetic Compatibility (EMC)

IEC  61000-6-2,  I EC  61000-6-4




Electrical Safety

JEC 62103/ IEC 62109-1&2




Protection against Islanding of Grid

IEEE154 7JIEC 62116/UL 1741/ equivalent EN/ BIS Standard




Other    subsystems/components used in the SPV power plants Cables, Connectors, Junction Boxes, Surge Protection Devices, etc.) must also conform to th e relevant  international/  national  Standards for Electrical  Safety. Besides that for Quality required for ensuring Expected Service Life and Weather Resistance. (IEC Standard for DC cables for PV systems is under development.  It is recommended that in the interim, the. Cables of 600-1800 Volts DC for outdoor installations should comply with the ENSD618 /TUV 2pfg 1169/ 08/ 07 for service life expectancy of 25 years). The cable should be electron beam cross-linked rated for 120 degree C with an operating temperature of 90 degree C.

Test Certificates

The PV modules, power conditioners deployed in the power plants must have valid test certificates for their qualification as per above specified IEC/ BIS Standards by one of the NABL Accredited Test Centers in India. In case of module types like Thin Film and CPV equipment for which such Test facilities may not exist in India at present, test certificates from reputed ILAC Member Labs abroad will be acceptable.


PV modules used in grid solar power plants must be warranted for output: wattage, which should not be less than 90% at the end of 10 years and 80% at the end of 25 years.
Disclaimer. This write-up is an attempt to simplify a legal/policy document of Government of India for the benefit of the gREntrepreneurs. Should there be any inconsistency between the policy document and this write-up, the original policy document shall prevail.

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