The power generated from many plain solar projects and some hybrid renewable energy projects stalled due to high tariffs is unlikely to find buyers, and their developers may have to exit the contracts, Santosh Kumar Sarangi, Secretary, Ministry of New and Renewable Energy (MNRE), said today.
Speaking at the BNEF Summit here, he said MNRE has asked the renewable energy implementing agencies (REIAs) to explore ways to ensure distribution companies (discoms) sign power purchase agreements (PPAs) for the stalled projects, including changing the projects’ profile.
“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, adding that the developers of these projects will have to exercise their penalty-free exit option or REIAs will eventually have to cancel the tenders. “But we will continue our efforts with the discoms to ensure that power from those projects is procured,” he said.
The Central Electricity Regulatory Commission (CERC), in July 2026, issued an order to address 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. The regulation allows the developers to exit the LoA route without surrendering their connectivity. In such cases, their existing bank guarantees will remain valid till the project achieves commercial operation.
A CERC staff paper issued in November last year said that more than 45 gigawatts (GW) of renewable capacity currently holds grid connectivity but has not progressed to the PPA stage. “If there is a requirement, there will be cancellations, but that is not our first option,” Sarangi said, adding that many developers are adding battery energy storage systems (BESS) to vanilla solar projects, making it more palatable to the discoms to market those bids.
Sarangi also said that the government estimates the renewable energy sector will attract $13 trillion in investment by 2070 and $500 billion by 2030.
Commenting on green hydrogen equipment manufacturing, Sarangi said that with electrolyser manufacturing having already started in the country, significant capacity in upstream components, including membranes and separators, is expected to come onstream by 2030-31.
He also said that the country will have manufacturing of polysilicon, the upstream solar power component, operational by about 2029-30. Many manufacturers have already made investment decisions in the ingots & wafers segment, where 30-50 GW of capacity is expected to come up by June 2028.
He also said that the government is planning to add a battery energy storage system (BESS) component to the successor scheme of PM-KUSUM for agricultural pump solarisation, allowing better management of decentralised renewable energy generation.
