Pragmatic Approach Needed To Promote Private Participation Under Scheme For Rooftop & Small Solar Power Plants: Delhi High Court

The Delhi High Court has said that the purpose of Achievement-Linked Incentives and Awards Scheme under ‘Grid Connected Rooftop and Small Solar Power Plants Program’ is to increase the installation and use of solar panels for the purpose of encouraging renewable energy projects.“In the opinion of the Court, the Scheme is a beneficial scheme the purpose of which is to promote private participation and incentivise energy efficiency. Thus, in such cases literal / technical construction ought to be avoided. Rather, the authorities ought not to follow a pedantic approach but a pragmatic approach that fulfils the purpose for which the Scheme was made,” the court said. Justice Prathiba M Singh said climate change is a cause for concern and harnessing solar energy is the need of the hour."India has already taken giant strides towards the same. The development of 40GW Rooftop Solar power, which is a part of India’s broad commitments before the United Nations Framework Convention on Climate Change (UNFCCC), as envisaged by the Scheme itself, is one such step. If India is to fulfil the said objective, public-private partnership has to play a prominent role in the same," said the court.The court made the observations in its decision on the petition filed by Sun Renewables RT Private Limited for release of the incentives under the scheme for the work done by it at NIMHANS, Bengaluru and AIISH, Mysuru in 2018. Though it was to install rooftop solar system at AIIMS, Rishikesh also, it could not do so as there was an expansion plan underway there.While the Centre released a sum of Rs. 1,45,44,000 to it in 2019, the petitioner said the subsidy or incentive released was at a lower rate of 15% of the benchmark cost of Rs. 60,000/- per KWP instead of 25% of the benchmark cost of Rs.60,000/- per KWP."It was so because the Ministry considered the achievement of the Petitioner as being 54.30% against the original target of 2976 KWP that was allocated. By comparing the achieved target against the original capacity allocated, the Ministry held the Petitioner to be entitled to an incentive of 15% to an overall amount of Rs. 1,45,44,000," the court was told. Sun Renewables argued before the Court that the NTPC Vidyut Vyapar Nigam Ltd (NVVNL) had confirmed in repeated communications that the sanction letter, though initially for 2976 KWP capacity, was later altered to 1616 KWP. It pleaded that despite the confirmation by NVVNL, the Ministry still considered the capacity to be 2976 KWP, while determining the incentives payable to the petitioner under the Scheme. It told the court that deletion of AIIMS, Rishikesh was for reasons unrelated to the petitioner and that the deletion of the said project from the sanction letter was duly approved by NVVNL. Under such circumstances, the incentive had to be based on the final sanction letter and not the initial sanction letter, Sun Renewables averred. The Union of India argued that the change in capacity allocation was to be considered by NVVNL within 3 months of issuance of LoA, based on the request of the bidder . It contended that no such request was made by Sun Renewables within the stipulated time. Perusing the record, the Court said the stand of the government that the request was not made within three months by NVVNL, "considering that the initial LoA was issued on 11th August, 2017 and the letter of the Petitioner to NVVNL was of 10th Nov 2017", is incorrect. “The stand of the Ministry that the work order had to be placed by the NVVNL within six months from the date of sanction from the Ministry thereby making the project, i.e., the Petitioner ineligible for incentive is also unreasonable. Even the sanction letter dated 12th February, 2018 explicitly states that the incentive amount shall be disbursed upon timely completion of the project," it added. The court said the ultimate test is that the project had to be completed within time prescribed, which the petitioner has fulfilled. “The change in the sanctioned capacity and its approval by NVVNL is not disputed. The factum of completion of the project is not disputed. As per the Scheme, if the implementation is 80% and above within the sanctioned period. The incentive ought to be given in the highest slab," said the court.The court said Sun Renewables cannot be blamed for deletion of AIIMS Rishikesh. "The deletion was duly accepted and, thus, the reason for rejection of the incentives in terms of the Scheme is not valid. The order dated 30th September, 2019 of the Ministry had calculated the incentive at a lower rate than what the Petitioner is entitled to. If the total allocation is taken as 1616 KWP, which justifiably ought to be taken as the sanctioned capacity, then there is no justifiable cause for refusing the incentive to the Petitioner,” it added. Holding that Sun Renewables entitled to the full incentives claimed by it, the Court directed the Ministry to release...

Pragmatic Approach Needed To Promote Private Participation Under Scheme For Rooftop & Small Solar Power Plants: Delhi High Court

Parina Katyal

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