Solar Power - A Practical Handbook

Phoenix Legal


Phoenix Legal is a full service Indian law firm offering transactional, regulatory, advisory, dispute resolution and tax services. The firm advises a diverse clientele including domestic and international companies, banks and financial institutions, funds, promoter groups and public sector undertakings. Phoenix Legal was formed in 2008 and now has 14 Partners and 65 lawyers in its two offices (New Delhi and Mumbai) making it one of the fastest growing law firms of the country.
The effects of global warming and ever-rising pollution have brought an increased environmental consciousness among people globally.
India Energy and Natural Resources
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Earth has enough resources to meet people's needs, but will never have enough to satisfy people's greed. (Mahatma Gandhi)

The effects of global warming and ever-rising pollution have brought an increased environmental consciousness among people globally. Various attempts have been made by governmental and non-governmental bodies to spread awareness about climate change and to control pollution. In India, use of fossil fuel-based energy resources, including in power generation, is one of the major reasons for pollution. On 2 October 2016, India ratified the Paris climate accord1 and committed to reduce its emission intensity to 35% below 2005 levels by 2030 and achieve a 40% cumulative electricity power capacity from non-fossil fuel-based energy resources by 2030.2 This shows India's twin focus on using renewable energy to meet its power requirements while simultaneously addressing the problem of pollution.

Among the various renewable energy resources such as solar, wind, small hydro and biomass, India, being a tropical country, has a high potential for solar energy. Most parts of India witness 300 sunny days a year,3 which translates into an incidence of 5,000 trillion kWh per year of energy over India's land mass (with most parts receiving 4–7 kWh per sq m each day).4 India can capitalise on this huge potential by using the latest advanced solar PV5 and thermal technologies6 and fulfil its commitment under the Paris climate accord.

This chapter sets out a general overview of key developments of the solar power sector in India and the Indian regulatory aspects applicable to the said sector.


2.1 Solar power sector in general

Less than a decade ago, solar projects were struggling to gain popularity and were required to be heavily subsidised by the Indian central government. The government's focus was on coal-fired power generation to support the unprecedented economic growth being witnessed during that period. Indeed, the Indian government had planned to set up ultra-mega power projects, each having a capacity of about 4,000 MW.7

In contrast to this earlier emphasis, the Gujarat state government recently dropped a plan to build a 4,000 MW imported coal-based ultra-mega power project because it believes that upcoming renewable energy units could meet its power requirements.8 This may be explained partly by the historic low tariffs offered by private bidders in the recently concluded competitive reverse auction for solar power projects in India which, surprisingly, were lower than conventional (coal-based) sources.9 The government received a low tariff of Rs 2.44/kWh (ie, US$ 0.037/kWh) for 500 MW of capacity in one of India's largest solar parks.10 To put this into perspective, in 2010 the tariff hovered around Rs 12.16/kWh (ie, US$ 0.17/kWh).11 This change augurs well for the prospects of solar power plants in India.

2.2 Solar power sector – development of laws/schemes/plans

(a) National Action Plan on Climate Change

India has been a keen and active participant in multilateral negotiations dealing with global challenges posed by climate change including the United Nations Framework Convention on Climate Change. However, its commitment to a cleaner environment has been practically difficult to implement because of the imperatives of growth and the need to meet the energy requirements of its vast population. As part of its commitment to a cleaner environment, and on the premise that developed nations will provide technologies and adequate financial resources, on 30 June 2008 India announced its plan for climate change, the National Action Plan on Climate Change (NAPCC).12

The NAPCC, without compromising India's prospects for a high growth rate (which is essential for increasing the standard of living of Indian people and reducing vulnerability to climate change), provides Eight National Missions that form its core.

(b) Jawaharlal Nehru National Solar Mission

The central government launched its flagship programme as one of the Eight National Missions identified in the NAPCC with the name 'Jawaharlal Nehru National Solar Mission' (JNSM). Under the brand 'Solar India', JNSM set an ambitious target of deploying 20,000 MW of grid-connected solar power in India by 2022.13 Achievement of this target was envisioned in three phases (the first phase up to 2013, the second phase from 2013–17 and the third phase from 2017–22).14

However, in June 2015, the central government approved a revision of cumulative targets under JNSM from 20,000 MW (20 GW) by 2021–22 to 100,000 MW (100 GW) by 2021–22 for grid-connected solar power projects.15 The revised target of 100,000 MW is planned to be achieved in a seven-year period. Broadly, it consists of 40,000 MW (40 GW) of grid-connected rooftop projects and 60,000 MW (60 GW) of large and medium-sized land-based solar power projects.16 JNSM is a policy of the central government pursuant to which several other schemes and incentives have been provided. It is discussed in further detail under section 3 of this chapter.

(c) International Solar Alliance

The International Solar Alliance (ISA) was inaugurated on 30 November 2015 at the climate summit in Paris. It has been set up with the United Nations as a strategic partner and India has been chosen for its headquarters. The foundation stone for the headquarters in India was laid on 25 January 2016 jointly by the Indian Prime Minister and the French President at the National Institute of Solar Energy in Gurugram, State of Haryana. ISA creates a collaborative platform for increased deployment of solar energy technologies to enhance energy security and sustainable development. Some commentators believe17 that the ISA needs a stronger focus and more commitment from the developed world.

(d) Pradhan Mantri Sahaj Bijli Har Ghar Yojana (Saubhagya Scheme)

The central government launched the Saubhagya Scheme on 25 September 2017 to achieve universal household electrification by 31 December 2018 by providing last mile connectivity to all households in rural and urban areas in India.18 Households in remote and inaccessible areas will be offered decentralised solar PV-based systems of 200–300 Watt peak each with battery packs, 5 LED lights, a fan and a power plug, along with free maintenance for five years.19 Earlier, the Deendayal Upadhyaya Gram Jyoti Yojana (DUGJ Scheme) was launched in 2015 with the aim of electrifying all 18,000 unelectrified villages by May 2018. Further, the '24×7 Power for All' programme was launched in 2015 with the objective of providing 24×7 power to all consumers across India by 2019.20 Though the central government has claimed successful implementation of the DUGJ Scheme, several reports have contradicted this claim.21 Some commentators have attributed this to the definition of electrified village adopted by the central government, as a village is considered electrified by the government if public places in the village and 10% of its households have access to electricity.

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1. See

2. India's Intended Nationally Determined Contribution, see

3. The Ministry of New and Renewable Energy's Annual Report for year 2016–17, see

4. The Jawaharlal Nehru National Solar Mission, see

5. Solar photovoltaic technology enables direct conversion of sunlight into energy.

6. Solar thermal technology utilises heat content of solar energy into useful application.

7. See

8. See

9. See

10. Id.

11. See and See

12. See

13. See footnote 3 above.

14. Id.

15. See footnote 2 above.

16. Id.

17. See

18. See; and See

19. See

20. See

21. See; and See

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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