Distributed Solar Power Association Approaches Delhi High Court over ALMM, this is what they said...

Honourable The Delhi High Court sought clarification from MNRE regarding the safeguards put in place to protect ongoing projects at various stages that will be adversely affected by the abrupt extension of the ALMM on net metering and open access projects, to which MNRE had no response and requested time to respond.

The petition was filed by DISTRIBUTED SOLAR POWER ASSOCIATION, a registered and prominent association of renewable energy developers and IPPs operating in the field of renewable energy from solar, wind, and wind solar hybrid for the commercial and industrial (C&I) segment. The association has been actively working on the development of these segments and playing a constructive role in collaborating with various ministries, policymakers, and regulatory bodies to promote the sector's growth.

According to reports, MNRE amended its office memorandum on "Approved List of Models and Manufactures" [ALMM] on 13th January 2022 to include projects under open access and net metering for using ALMM-approved solar modules applicable within a two-and-a-half month period.

Various developers and developer and industry associations approached MNRE seeking clarification on whether the same will apply to private projects developed for C&I consumers where no government subsidy / CFA is provided and to ensure that adequate time is provided for the amendment's implementation to avoid affecting ongoing projects.

Due to the ministry's failure to respond to and confirm this situation, the developers were forced to pursue legal remedies and petition the Honourable Delhi High Court for relief.

Surprisingly, the counsel for MNRE had no response or guidance regarding how the ongoing projects would be safeguarded against such an order.

Private developers engaged in C&I segment installations are already facing supply shortages and delays, and such abrupt amendments have resulted in an artificial increase in solar module prices due to issues such as cartelization and a demand-supply imbalance within the country. Additionally, beginning April 1, the duty on solar modules will increase from zero to 40%, a significant deterrent to the sector.

The most pertinent question is that over 4 GW of open access and rooftop projects are in various stages of development and have been granted open access / net metering approvals / agreements necessary for project commissioning. All of these initiatives will become stalled, resulting in major financial consequences for these customers and developers.

The developers have asserted that C&I projects utilising open access and net metering should be exempt from these orders because they are not supported by the government and/or receive subsidies. Additionally, current solar module supply are insufficient to support even government-funded projects, resulting in a significant setback for these initiatives. The country needs to build approximately 34 GW of solar per year, but current capacity is only 10 GW, and not all module manufacturers meet reliability standards or are producing modules for use in such commercial projects.

Foreign module manufacturers have stated that, while their modules have been duly BIS certified and passed, because MNRE officials are unable to physically visit their manufacturing facilities for a variety of reasons, including travel advisories, their modules have been unable to be listed on the ALMM List despite proven track records and BIS certifications, as well as all documents, fees, and charges submitted to MNRE for the same for an extended period of time.

Prior to issuing such orders / amendments, the MNRE held no consultation meetings or solicited input from developers or consumers, and acted solely on the recommendation of a few module manufacturers who also have control over cells, making these amendments in haste, without delving deeply into and detailing the various associated aspects; one developer stated.

Developers remain hopeful that MNRE, which recognises the gravity of the situation, will come up with a concrete solution to resolve this issue in the larger interest of renewable energy development and the sector at large, and will extend the amendment for at least one year to ensure that ongoing projects do not face a crisis.

The next hearing date is March 29, 2022, when the Honourable HC will hear and determine the matter.

MNRE previously had some ambiguity around the ALM notice, which they have resolved.

Grid Solar Power Division of the Ministry of New and Renewable Energy, MNRE, has released clarifications about the ALMM Order's applicability and implementation.

The Ministry has received representations requesting clarifications on several provisions of the ALMM Order, 2019.

According to paragraph 3 of the order, only the models and manufacturers listed are eligible for use by the government, projects funded by government schemes, government-assisted projects and programmes, and projects established to provide electricity to the government on a large scale.

The term 'Government' refers to the Central Government, State Governments, Central and State Public Sector Enterprises, and Central and State Organizations.

The ALMM order will be applied to all bids submitted on or after April 10, 2021. The ministry added, "Modules bought for projects covered by the ALMM Order should have been included in the ALMM List-I valid on the date of module invoicing."

ALMM (Approved List of Models and Manufacturers) order establishes a list of acceptable models and manufacturers of photovoltaic cells and modules that conform to BIS Standards. The official memorandum is available here.

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