India to take criminal action against errant solar power developers

New Delhi: India will penalize solar power developers who are using foreign equipment in power generation projects that were awarded on the basis that they would only use locally-made solar cells and modules.

According to an office memorandum from the ministry of new and renewable energy (MNRE) reviewed by Mint, these actions include filing of criminal case under 420 and related sections of the Indian Penal Code, blacklisting of the developer for 10 years, forfeiting of bank guarantee and disciplinary case against the concerned officers of the state-run firms and the state governments.

These projects, awarded under the so-called domestic content requirement (DCR) route by state-owned firms, are required to use solar cells and panels made in India. Also, under the solar rooftop scheme, the government gives subsidy on the condition that the modules should be made in India wherein solar cells can be imported. This assumes significance as of India’s plan to add 100 gigawatt (GW) of solar power capacity by 2022, 40GW is to come from rooftop projects.

Mint reported on 27 November about the Indian government’s plans to take stringent action against such offenders, including making it mandatory for developers to publicly disclose the radio-frequency identification (RFID) tag information of the panels used in solar projects. It will also be incumbent on the developers to share the RFID list of rejected panels.

“There have been some complaints. Earlier, these provisions were not there and will help in curbing such malpractices,” said Anand Kumar, secretary, MNRE.

Mint also reported on 7 September that poor quality Chinese solar modules, rejected by developers, were being sold in the domestic market at a discount.

Solar modules or panels account for nearly 60% of a solar power project’s cost. For China’s solar panel manufacturing capacity, estimated to be around 70 GW per year, the major markets are the US, India and China itself.

“Apprehensions have been raised that the policy may be misused by way of mis-declaration and imported solar cells and modules may be used in DCR projects instead of domestically produced cell and modules,” the memorandum stated.

Seized of the issues, the Indian government also introduced stringent quality norms in August for solar equipment to be sold in the country and made the destruction of sub-standard equipment mandatory.