Solar Energy Companies Face Maze Of 799 Compliances: Team-Lease Report

(MENAFN- KNN India) New Delhi, Jun 6 (KNN) A standalone solar power plant located in Maharashtra, with its corporate headquarters in Haryana, is subject to 799 unique compliance obligations, resulting in 2,735 compliance tasks annually, according to a new report released by TeamLease RegTech titled Decoding Compliance Management for Renewable Energy Sector.

The report reveals that the regulatory requirements span across central, state, and municipal levels and are spread across seven categories of law and three tiers of legislation.

Of the 514 compliance obligations applicable to the corporate office, 83 carry imprisonment clauses, many of which relate to procedural lapses. In total, 646 obligations stem from central legislation, 151 from state laws, and two from municipal regulations.

The plant's manufacturing unit alone must secure 51 approvals, permissions, and registrations while meeting 285 legal mandates, covering areas such as safety standards, employee welfare, and statutory audits.

These obligations fall under the purview of multiple authorities, including the Central Electricity Regulatory Commission (CERC), State Electricity Regulatory Commissions (SERCs), and the Bureau of Energy Efficiency (BEE).

Key regulatory requirements include Renewable Purchase Obligations (RPOs), adherence to the Energy Conservation Act, tariff policies, environmental clearances, and compliance with grid integration standards issued by the Central Pollution Control Board (CPCB).

Challenges identified in the report include regulatory fragmentation across jurisdictions, overlapping mandates from different authorities, delays in land acquisition and environmental clearances, and inconsistent policy implementation.

The persistence of manual, paper-based compliance systems further heightens the risk of non-compliance.

The 799 obligations are distributed as follows: labour (244), secretarial (238), industry-specific (106), finance and taxation (84), environment health and safety (58), commercial (38), and general legal obligations (31). These span multiple frequencies: 58 monthly, 94 quarterly, 45 half-yearly, and 114 annual obligations, with 88 obligations being event-based or one-time requirements.

The report emphasises the layered nature of the regulatory landscape, noting the overlapping jurisdiction of central and state governments in critical areas such as labour and electricity.

Of the 51 approvals required to establish and operate the plant, 10 pertain to setup, 7 to pre-commissioning, 4 to post-commissioning, and 30 to ongoing operations, governed under a framework of at least 31 separate Acts and Rules.

Imprisonment clauses are most prevalent in labour law compliance, constituting 77.1 per cent of such clauses, followed by secretarial (12 per cent), finance and taxation (8.4 per cent), and EHS regulations (2.4 per cent).

Legislative origin analysis shows that 66.3 per cent of these clauses arise from central laws, while the remaining 33.7 per cent are from state statutes.

Compliance obligations also include filing returns, maintaining registers and records, making payments, obtaining licenses and certificates, handling inspections, ensuring workplace safety and welfare, and conducting audits.

The company in question employs fewer than 100 staff members and more than 20 contract labourers. Its operations involve diesel generators, fire extinguishers, battery usage, and the generation of e-waste, battery waste, and solid waste, with a focus on zero liquid discharge.

To manage this complex compliance environment effectively, the report recommends that renewable energy firms adopt a centralised and automated compliance management strategy, enabling them to ensure greater efficiency and reduced legal risk.

(KNN Bureau)

MENAFN06062025000155011030ID1109646097