Solar Federation seeks extension of inter-state transmission fee waiver

The National Solar Energy Federation of India (NSEFI) has urged the government to protect the viability of numerous renewable energy projects facing risks from delays beyond the control of developers, according to a person familiar with the matter.

In the letter to the advisor to the Prime Minister's Office, the federation urged that the Inter-State Transmission System (ISTS) charges waiver be extended to projects getting commissioned by June 2026 and meeting a specific criterion relating to connectivity application status, financial closure, land acquisition beyond the 50 per cent threshold, and if orders for equipment have been made.

The federation, representing a broad spectrum of stakeholders across the solar value chain, stated that while the ISTS waiver, originally announced by the Ministry of Power (MoP), has played a "pivotal role in making renewable power more competitive", its delayed implementation by the Central Electricity Regulatory Commission (CERC) in February 2023 left many developers in a limbo.

ISTS charges are the fees levied for using the transmission infrastructure to move electricity between states. They are imposed to cover the costs relating to building and maintaining transmission lines and other infrastructure required for interstate electricity transfer. According to an energy expert, industry estimates state that renewable energy projects of nearly Rs 5 lakh crore would be impacted if the waiver of ISTS charges is not extended.

"Several RE developers made early investments, securing land, achieving financial closure, and signing definitive agreements based on the original MoP notification," the federation said. However, due to aspects like the nearly two-year lag in CERC's ratification and other uncontrollable factors, these developers are now at risk of missing the commissioning deadline of June 30, 2025, making them ineligible for the waiver.