Ministry of Power Unveils New Guidelines for Grid-Connected Solar Projects, Fostering Transparency and Competitive Bidding

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Representational image. Credit: Canva

The Ministry of Power has introduced key guidelines to propel the growth of solar PV power projects in India. The guidelines apply to all upcoming solar projects, with or without energy storage, marking a significant inclusion as the earlier guidelines lacked provisions related to energy storage. The Power Purchase Agreement (PPA) period has been revised to 20 years from the scheduled commissioning date, with a possibility of extension up to 25 years under exceptional circumstances beyond the generator’s control; this is a reduction from the previous PPA period of 25 years. In terms of the bid structure, bidders will now be allocated the power capacity they offer only if their tariff bids fall within 2-5% of the lowest bidder’s tariff. Additionally, a single bidder can be allocated a maximum of 50% of the total capacity specified in the Request for Selection (RfS), a restriction that did not exist in the earlier guidelines.


To streamline the process, the guidelines have set an indicative timetable for the bidding process, ensuring completion within approximately 110 days, with the provision of additional time for bidders in case of changes in the RfS document. The guidelines address power procurement by imposing penalties of one and a half times the PPA tariff on generators for energy shortfalls below the minimum capacity utilization factor (CUF), and giving the procurer the first right of refusal to purchase excess generation if the energy available exceeds the maximum CUF.

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The commencement of power supply for projects varies according to their capacity, with projects up to 1,000 MW needing to begin within 24 months of signing the PPA, and projects above 1,000 MW requiring commencement within 30 months. For delays beyond six months from the scheduled commissioning date, the guidelines prescribe a reduction in contracted capacity and termination of the PPA for the remaining contracted capacity, along with the possibility of the generator being debarred from participating in bids for a specified period. These guidelines are expected to enhance transparency, promote competition, and encourage investments in the solar power sector while ensuring consumer interest and sustainable growth.


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