RE developers may exit plain solar, high-tariff hybrid projects: MNRE secy

MNRE has asked renewable energy implementing agencies to explore ways to secure power purchase agreements for stalled projects, including by changing their profile

Power generated from many plain solar projects and some hybrid renewable energy projects stalled by high tariffs may struggle to find offtake, forcing developers to exercise penalty-free exit options, Santosh Kumar Sarangi, secretary, Ministry of New and Renewable Energy (MNRE), said on Friday.

 

Speaking at the BNEF Summit in New Delhi, he said MNRE had asked renewable energy implementing agencies (REIAs) to explore ways to get distribution companies (discoms) to sign power purchase agreements (PPAs) for the stalled projects, including by changing their project profiles.

 

“We foresee that many vanilla solar projects and other bids will not be sold. Some of the hybrid tenders where the price discovery was higher are also finding it difficult to be sold,” he said. Developers of these projects would have to exercise their penalty-free exit option or REIAs would eventually have to cancel the tenders, he added. “But we will continue our efforts with the discoms to ensure that power from those projects is procured.”

   

The Central Electricity Regulatory Commission (CERC), in an order issued in July 2026, allowed renewable energy projects that secured transmission connectivity based on Letters of Award (LoAs) but have not signed PPAs within 12 months of receiving the LoA to exit the LoA route without surrendering their connectivity. Existing bank guarantees will remain valid until the project achieves commercial operation.

 

A CERC staff paper issued in November last year said more than 45 gigawatts (Gw) of renewable capacity had grid connectivity but had not progressed to the PPA stage. “If there is a requirement, there will be cancellations, but that is not our first option,” Sarangi said. Many developers are adding battery energy storage systems (BESS) to vanilla solar projects, making them more attractive to discoms, he added.

 

Sarangi said the government estimates that the renewable energy sector will attract $500 billion in investments by 2030 and $30 trillion by 2070.

 

On green hydrogen equipment manufacturing, he said electrolyser manufacturing had already begun in India, while significant upstream component capacity, including membranes and separators, was expected to come onstream by 2030-31.

 

Polysilicon manufacturing, an upstream solar power component, is expected to begin by 2029-30, Sarangi said. Manufacturers have already made investment decisions in ingots and wafers, with 30-50 Gw of capacity expected to come up by June 2028.

 

The government is also planning to add BESS components to the successor scheme to PM-KUSUM for agricultural pump solarisation, allowing better management of decentralised renewable energy generation, he said.