Solar projects in Raj worth ₹2k cr stalled amid policy uncertainties

Jaipur: After orders for production curtailment, solar power developers in the state are now being denied permission to commission projects worth Rs 2,000 crore (500MW) due to policy ambiguities surrounding Battery Energy Storage Systems (BESS).

Industry stakeholders said the state energy department’s rules for mandatory battery storage alongside solar plants are being interpreted negatively to hold back approvals.

As per the policy rolled out about six months ago, solar developers setting up plants for companies to sell power were given 15 months to install mandatory battery storage up to 25% of plant capacity.

Despite this timeline, approvals required for power supply – including commissioning clearances, long-term open access agreements and wheeling and banking arrangements (WBA) – have been withheld by discoms and the Prasaran Nigam.

“Despite being technically ready, projects are unable to begin operations due to the absence of final approvals and take-off clearances,” said Nitin Agarwal, CEO of Rajasthan Solar Association (RSA).

Expressing disappointment, Agarwal said the lack of a clear standard operating procedure (SOP) and inconsistent interpretation of regulations by different arms of the govt have created stifling bottlenecks.

In a recent meeting held to find a way out and save affected projects, solar industry representatives said govt authorities are insisting that BESS be installed before solar commissioning, even though a 15-month grace window is allowed.

Citing examples, Arun Mahla, RSA vice president and director of Stockwell Solar Services, said even those projects that have already set up both solar plants and BESS units are being denied permission to start operations. “There is no standard operating procedure in place even for those who have set up battery systems,” said Mahla.

Industry insiders also flagged difficulties in sourcing raw material for battery storage due to ongoing tensions in the Gulf region.

The financial implications resulting from these issues are severe. Many developers financed their projects through bank loans, anticipating timely commissioning and revenue generation. With projects unable to supply power, however, cash flows have dried up, making it difficult to service debt.

“If the situation persists, several developers risk being classified as non-performing or default entities, which could restrict their ability to secure financing for future projects,” said RSA’s Agarwal.

During the Resurgent Rajasthan summit, the state govt signed MoUs worth 35 lakh crore, with projects worth Rs 28 lakh in the power sector alone. Policy flip-flops since then are expected to have a telling impact if investors feel their investments are not safe in the state.

GFX

Hitting Investor Confidence

Policy ambiguity around mandatory Battery Energy Storage Systems hits solar projects

State energy dept rules require up to 25% battery storage capacity of solar plants within 15 months

Despite this grace period, approvals for commissioning, open access and wheeling are being withheld

Industry stakeholders blame the absence of a clear SOP and inconsistent interpretation of rules

Authorities insist on installing BESS before solar commissioning, contradicting a 15-month grace window

Even projects that have already set up both solar and BESS units are denied permissions due to procedural gaps

Financial stress is mounting as developers struggle to service bank loans without revenue from power supply
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