Centre Orders Renewable Energy Agencies to Cancel Hasty Solar Tenders
The Indian government has directed renewable energy agencies to cancel and reissue tenders for government projects that were rushed through to circumvent rules. This move aims to ensure compliance with the mandate to use locally-made solar cells and modules.
Renewable EnergySolar PowerClean EnergyLocal ManufacturingGovernment ProjectsReal Estate MumbaiOct 03, 2025
Most Indian companies currently rely on cheaper China-made solar cells. However, starting from June 1, 2024, India's clean energy policy mandates that developers of government projects use only locally manufactured modules and cells. This rule is part of the government's broader strategy to promote domestic manufacturing and reduce dependency on foreign components.
Renewable energy agencies act as intermediaries between the government and private players, issuing tenders for projects. Once these projects are constructed, the electricity generated is sold to state power utilities. The ministry's circular does not specify which agencies were involved or the values of the projects in question, but it emphasizes the need for compliance with the new rules.
The short window provided for bid submission may have been a tactic to circumvent the requirement to use domestic solar cells. The ministry has given the agencies 15 days to report back on the actions taken to cancel and reissue the tenders.
India aims to become largely self-sufficient in solar cells by March 2027, but effective production could be lower in the initial quarters, according to a research note by SBI Caps in August. This timeline underscores the government's commitment to fostering a robust domestic solar manufacturing industry, which is crucial for achieving energy security and reducing carbon emissions.
The government's push for local manufacturing is part of a broader initiative to boost the renewable energy sector and meet the country's ambitious targets for renewable energy capacity. By ensuring that government projects use locally produced components, the government hopes to stimulate investment in the domestic solar industry, create jobs, and enhance the country's energy resilience.
The circular from the renewable energy ministry is a significant step towards achieving these goals. It sends a clear message to all stakeholders that compliance with the new rules is non-negotiable and that the government is committed to a transparent and fair tendering process.
Frequently Asked Questions
Why did the government order the cancellation of solar tenders?
The government ordered the cancellation of solar tenders to ensure compliance with the new rule requiring the use of locally-made solar cells and modules. Some agencies were rushing through the tender process to avoid this requirement.
What is the new rule for government solar projects?
Starting from June 1, 2024, government solar projects must use only locally-made solar cells and modules, as mandated by India's clean energy policy.
How long do agencies have to report back on the action taken?
The agencies have been given 15 days to report back on the actions taken to cancel and reissue the tenders.
What is India's target for solar cell self-sufficiency?
India aims to become largely self-sufficient in solar cells by March 2027, although initial production may be lower.
What is the broader goal of promoting local manufacturing in the solar sector?
The broader goal is to boost the domestic solar manufacturing industry, create jobs, enhance energy resilience, and meet India's ambitious renewable energy targets.
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