The Acme Solar subsidiary, ACME Aklera Power Technology, has received relief from the Rajasthan Electricity Regulatory Commission (RERC) in a petition seeking compensation for Change in Law events related to a 250 MW solar project. The project was awarded to Acme in 2019 and was commissioned in two phases in 2023 and 2024. The Change in Law events arise from the increase in GST from 5% to 12% and the imposition of Basic Customs Duty (BCD) on solar modules and cells.
The RERC has allowed Change in Law compensation of approximately Rs. 39.92 crores, comprising Rs. 30.98 crores towards BCD and Rs. 8.94 crores towards GST. Additionally, the commission has allowed carrying cost from the date of incurring up to the date of order, which is approximately Rs. 7.50 crores. The total amount allowed to the company is approximately Rs. 47.40 crores.
The compensation will be paid through an annuity mechanism at a 9% discount rate over 15 years or the balance PPA term, whichever is less. The RERC has disallowed certain claims of BCD and GST of approximately Rs. 7.82 crores, which the company intends to appeal before the Appellate Tribunal for Electricity.
This case sets a precedent for renewable energy developers in India, demonstrating that regulators will uphold change-in-law protections. It provides certainty and stability for investors in solar projects, encouraging further renewable energy expansion. The case also highlights the tension between policy changes, such as duties to promote domestic manufacturing, and the financial health of ongoing renewable projects.
The timeline of key events shows that the Indian government has made several changes to policies and duties affecting the solar industry, including the imposition of safeguard duty, customs duty, and GST. These changes have increased costs for developers and have been factored into tariffs. The RERC’s order recognizing GST and BCD as Change in Law events and allowing compensation to developers is a significant development in the Indian solar industry.
The decision is expected to have a positive impact on the renewable energy sector, as it provides clarity and certainty for investors and developers. It also underscores the importance of considering the impact of policy changes on ongoing projects and the need for regulators to balance the interests of different stakeholders. The case is likely to be closely watched by the industry, and its outcome may have implications for future renewable energy projects in India.