MNRE Guidelines for off Grid Solar Power Plants

MNRE guidelines for off grid solar power plant:-

Curriculum Outline:

Scope of the guideline, Salient feature, Implementation model, Submission proposal, Selection of RESCO, Tariff Estimation, Power purchase agreement, Implementation timelines, Monitoring, Responsibilities of Implementing agency, Technical Requirements & Interpretation of guideline.

1. Introduction:

Energy is the most important parameter to determine the economic growth of any country. There is a greater requirement to accelerate energy access programs in rural areas where conventional grid is yet to reach or reliability of grid supply is not up to the desired level. Off grid solar systems, working independently or in tandem with the grid will be a viable solution for increasing energy access in these areas.

 Under the Phase III of Off-grid and Decentralized Solar PV Applications Programme of MNRE, off-grid solar power plants of individual size up to 25 kWp can be installed in areas where grid power has not reached or is not reliable. Such plants are mainly aimed at providing electricity to Government schools, hostels, panchayats, police stations and other public service institutions. Vide Order No. 32/6/2020-SPV Division dated 24.04.2020 the Scheme has been extended up to 31.3.2021 and applicable only for North-eastern States for installation of off grid solar PV plants through RESCO mode with Central financial assistance (CFA) of 90% of the benchmark cost of the system. Guidelines for implementation of Phase-III of Off-grid and Decentralized Solar PV Applications Programme were issued on 07.08.2018, and remain valid during the extended period of implementation.

2. Scope of The Guideline:

As per the Guidelines for Off-grid and Decentralized Solar PV Applications Programme Phase-III dated 07.08.2018, off-grid solar power plants up to 25 kWp capacity can be installed in areas where grid power has not reached or is not reliable. Such plants are mainly aimed at providing electricity to Government schools, hostels, panchayats, police stations and other public service institutions.

As the intended beneficiaries for off-grid solar power plants are public service institutions, there could be difficulty in arranging the beneficiary share in an upfront manner. Further, after initial AMC period is over, continuing of O&M of plant is an issue due to lack of availability of required funds and technical knowledge of the beneficiary. In order to effectively ultilise the costly assets of solar PV system created through public money, it has been decided that such system should be operated through RESCO mode. These guidelines provide implementation framework for operation of off-grid solar PV systems through RESCO mode

3. Salient Feature For Off grid Solar PV Plants:

With an objective to ensure proper repair and maintenance of the off-grid solar power plants to be installed under the Programme and promote efficiencies in operation, it has been 2 decided to introduce RESCO model for such systems. The plants would be eligible for CFA at 90% of the benchmark cost. This CFA provided by the MNRE would reduce the financial burden to a significant level, which otherwise results in very high tariff in per unit terms due to smaller size of plants and requirement of storage batteries.

Under the programme, off-grid solar power plants can be installed in areas where the grid power is not available and areas where grid power though available but not reliable. Design aspects for both kinds of solar plants are given below:

A.For Isolated Off-grid solar plants 

1. To bring down the cost by optimizing the size of the required solar power plant, only energy efficient equipment e.g. LED lights, BLDC fans, 5-star rated appliances, etc. shall be used by the beneficiary.

2. Daily energy requirement to be calculated based on load and running hours. 

3. DC appliances are more efficient and therefore, wherever possible plant should be designed for using DC appliances only and in such cases applicable LVDC standards specified by BIS shall be followed.

4. Efficiency of equipment like charge controller, inverter and distribution losses in the wiring should also be accounted properly for calculating solar PV and battery capacity.

5. Solar PV capacity and Battery back-up sufficient for supplying daily guaranteed energy shall be kept.

6. MPPT inverter shall be used.

7. The MNRE/BIS specifications to be used for all system components.

8. Solar power supplied from the plant shall be metered at the point of delivery. 

9. Remote Monitoring System shall be deployed with the system.

10. Only indigenous components should be used in the solar power plant.

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For Grid connected system

1. Off-grid solar PV system to be designed only for essential/emergency load.

2. Energy efficient equipment e.g. LED lights, BLDC fans, 5-star rated appliances, etc. to be used for such essential/emergency load and should be supplied through separate electric circuits.

3. DC appliances are more efficient and therefore, wherever possible plant should be designed for using DC appliances only for such essential/emergency load and in such cases applicable LVDC standards specified by BIS shall be followed.

4. Daily energy requirement to be calculated based on load and running hours.

5. Efficiency of equipment like charge controller, invertor and distribution losses in the system should also be accounted properly for calculating solar PV and battery capacity

6. Solar PV capacity and Battery back-up sufficient for supplying daily guaranteed energy shall be kept.

7. MPPT hybrid inverter shall be used.

8. The MNRE/BIS specifications to be used for all system components 

9. Solar power supplied from the system shall be metered at the point of delivery.

10. Provision to be made for feeding surplus power to the grid on net-metering basis.

11. Remote Monitoring System shall be deployed with the system.

12. Only indigenous components should be used in the solar power plant.

4. Implementation Models & Financial Assistance:

The life of solar PV panels are considered 25 years, however, off-grid solar power plant involves equipment like batteries, charge controllers, MPPT invertors, etc., and under CAPEX mode such plants are guaranteed for five years by the vendors. Under RESCO model it is proposed that the vendor will install and operate the solar power plant of capacity up to 10 kWp for at least 10 years and solar PV plants of capacity above 10 kWp for at least 15 years. Solar power plants will be installed by the RESCO on BOOT basis. After completion of this time period the plant will be handed over to the beneficiary in operating condition and the vendor shall train at least two persons identified by the beneficiary for day-to-day O&M of solar power plant well in advance before handing-over the plant.

MNRE CFA of 90% of the benchmark cost will be paid upfront on successful commissioning of plant. The MNRE CFA will be available on benchmark cost. The MNRE benchmark cost covers cost of complete system, transportation of material at site, installation, commissioning, insurance and AMC for five years.

The solar power plant shall be designed to supply Daily Minimum Guaranteed Energy (DMGE) to the beneficiary at the delivery point. The RESCO Company selected through competitive bidding will install the plant and operate the plant to supply DMGE to the beneficiary organization at the discovered tariff for the aforementioned period. The beneficiary will make payment to the RESCO according to the DMGE. During the periods of overcast/ cloudy/ rainy conditions lasting continuously for 3 (three) days or more, the requirement of DMGE shall be reduced to 30% on per day basis from the third day onwards. DMGE requirement shall restore from the day such weather conditions subside.

The company will undertake to provide the services for the specified period and submit bank guarantee for an amount equivalent to 40% of the eligible MNRE's CFA. Bank guarantee will be released at the end of five years or at the time of replacement of batteries, whichever is later for projects up to 10 kWp capacity (10 year project life). For project of capacity more than 10 kWp and up to 25 kWp (15 years project life), 40% of bank guarantee will be released at the end of five years or first replacement of batteries, whichever is later and balance 60% of bank guarantee will be released at the end of 10 years or second replacement of batteries, whichever is later.

5. Submission of Proposal:

Proposals for installation of off-grid solar power plants will be submitted by the State Nodal Agencies. The MNRE may also appoint an expert PSU for preparation of DPRs, preparing RfS, conducting tendering process for selection of RESCO, monitoring of installation and 4 commissioning, etc. Proposals will be placed before the Screening Committee once in each quarter. Projects recommended by the Screening Committee will be sanctioned.

The implementing agency, SNA or expert PSU as the case may be would be eligible to get the applicable service charges.

6. Selection of RESCO: 

RESCO Company will be selected through open competitive bidding to be conducted by implementing agency. Bidders will be invited to submit proposals for installation of the offgrid solar power plant at the specified location for 10/15 years based on plant capacity. Bidder quoting the lowest tariff for supply of power to the beneficiary organization, will be eligible for award of project.

Implementing agency shall reserve the right to negotiate the L1 bid with the concerned bidder to ensure affordability to the beneficiary organization and efficient use of public funds provided as CFA under the project. This includes the option of rejecting the offer, if it is felt that the tariff offered is not commensurate with the market trends.

7. Tariff Estimation:

A representative system of 4 kWp has been considered for estimation of tariff. Average daily solar power generation per kWp of solar panel is considered 2.5 kWh as NE Region has lesser sunny days and low solar radiation levels. Therefore, the daily minimum guaranteed solar power would be 10 kWh. With battery back-up of 7.2 VAh per Wp total battery requirement would be 28.8 kWh. It is assumed tubular-gel batteries having life of 4-5 years would be used and required to be replaced only once (at power producer‘s cost) during the contract period of 10 years. The MNRE benchmark cost has been considered for arriving total cost of project. The developer will arrange loan @ 12% for investment in the project. Tariff estimation with above assumptions is placed at Annexure. In this case the levelized tariff discovered is Rs. 5.96 per kWh.

These calculations are representative only and the tariff may be calculated by the bidder based actual cost of finance, expected return on equity, O&M cost, working capital, depreciation, site requirements, etc. It is expected that the bidders will make all necessary efforts to bring down the tariff by using prudent technical and financial efficiencies.

8. Power Purchase Agreement:

The Power Producer i.e. RESCO and Power Purchaser i.e. beneficiary organization shall sign a PPA. Power producer shall be responsible to design, install, operate and maintain the solar power plant to supply Daily Minimum Guaranteed Energy (DMGE) to the beneficiary and beneficiary will make payment for the DMGE at tariff decided through bidding process on monthly basis. In case the Power Producer fails to supply DMGE or power required by the beneficiary, whichever is less, the developer will be liable to pay penalty for the units supplied less than the DMGE at a rate specified in the PPA. The penalty could be up to two times of the rate at which power is supplied by the developer to the beneficiary. Daily 5 Minimum Guaranteed Energy (DMGE) will not be applicable for day

9. Implementation Timelines:

Project shall be installed and commissioned by the successful RESCO within 3 months from placement of award by implementing agency. Maximum extension of 3 months can be provided to RESCO, provided the reasons for delay are beyond the control of the RESCO. Any delay beyond 3 months will result in cancellation of award.

10. Monitoring: 

All solar power plants sanctioned under the Programme shall be provided with remote monitoring system. Access of remote monitoring system shall be provided to implementing agency and the MNRE. Implementing agency will submit quarterly performance data of solar power plant to the MNRE in format prescribed by the MNRE. Detailed provisions elaborated under Para-8 ‗Monitoring‘ of the Guidelines dated 07.08.2018 may be referred for monitoring of solar power plants installed under RESCO mode.

11. Responsibilities of Implementing Agency:

Responsibilities of Implementation agency under these Guidelines are as under:

1. Conduct on-site survey of the beneficiary premises and prepare DPR, ascertaining fulfillment of the eligibility conditions for CFA, before submitting the proposals to the MNRE.
2. Conduct tender for selection of bidder for installation of solar power plant under RESCO mode.
3. Accept bank guarantee from the successful bidder, wherever required.
4. Online submission of quarterly progress reports.
5. Ensure project completion within the given timelines and compliance of the MNRE Guidelines and Standards.
6. Inspection of installed systems and submission of commissioning reports to the MNRE.
7. Disbursement of the MNRE CFA and submission of utilization certificates and audited statement of expenditure through EAT module.
8. Performance monitoring and evaluation.
9. Any other activity to ensure successful implementation of the programme.

12. Scope of The Guideline:

Systems installed under the Programme shall meet technical specifications and construction standards as specified by BIS and the MNRE from time to time. Non-compliance will be taken seriously to the extent of blacklisting of the vendor, apart from taking action under any other law in force. Only indigenously manufactured PV modules should be used in the Programme

13. Scope of The Guideline:

These Guidelines shall be read with the Off-grid and Decentralized Solar PV Applications Programme Phase-III Guidelines issued by Ministry on 07.08.2018. In case of any ambiguity in interpretation of any of the provisions of these guidelines, the decision of the Ministry shall be final.

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