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Key Changes in Solar Bidding Guidelines: What Developers Need to Know

Recent amendments to India’s solar bidding guidelines introduce important changes that every renewable energy (RE) developer should be aware of. These updates are designed to improve project execution, performance monitoring, and risk management in the solar energy sector.

Key Changes:

• Location-Specific Grid Connection: Procurers can now specify the exact sub-stations for grid interconnection, improving planning, especially for projects integrating energy storage.
• Stricter Performance Rules: If the minimum Capacity Utilization Factor (CUF) isn’t met for two consecutive years, the CUF obligation will be reduced to actual performance, and developers will face a fixed penalty for 24 months or the remaining PPA term, making operations more performance-driven.
• Change in Law Definition: Regulatory changes impacting a project within seven days of bid submission now qualify as a "Change in Law," ensuring better cost recovery and risk management.
• Faster PPA/PSA Execution: PPAs must be signed within 30 days of the Letter of Award (LoA), making bid finalization more time-sensitive. Delays beyond this period will result in LoA cancellation.
• Tariff Adoption Deadline: Procurers must submit discovered tariffs to regulators within 30 days post-auction, improving energy market clarity.
• New Financial Security Options: Developers can now use Insurance Surety Bonds instead of traditional Bank Guarantees, reducing financial burdens and improving cash flow.
• PBG Linked to Actual Supply: Performance Bank Guarantees will be returned within 45 days of actual power supply commencement, rather than the scheduled commercial operation date.
• Stronger Technical & Cybersecurity Compliance: Developers must install GPS-enabled Weather Stations (AWS) for improved solar forecasting and adhere to updated cybersecurity norms.
• Stricter Bid Standardization: Any deviations from the guidelines require formal regulatory approval within 60 days, ensuring fair bidding and greater transparency.

These changes make solar bidding more structured, performance-driven, and financially flexible. Developers will need to adapt to the stricter timelines, enhanced risk management, and higher compliance standards for successful project execution.