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					</table><p>In a significant ruling upholding policy certainty in India’s renewable energy sector, the <a href="https://hcraj.nic.in/hcraj/" target="_blank" rel="noopener">Rajasthan High Court</a> has held that the state government cannot retrospectively withdraw electricity duty exemptions promised under its Solar Policy 2019.</p>
<p>The Court said that while the government has the power to change policies, such changes cannot operate retrospectively to take away accrued rights. Rejecting the Rajasthan government’s argument that the duty exemptions depend on statutory notifications, it said the policy itself represented an assurance that such benefits would be granted.</p>
<p>Withdrawing the duty exemptions without compelling public interest was arbitrary and violative of Article 14 of the Constitution, the Court said.</p>
<p>The High Court directed that captive solar projects commissioned before the May 10, 2022, amendment to the Solar Policy are entitled to the promised seven-year electricity duty exemption. The withdrawal of the duty exemption will apply prospectively to future projects, it said, directing the authorities to verify the commercial operation date of each project before granting benefits.</p>
<p><strong>Background</strong></p>
<p>The Rajasthan government, in its Solar Policy 2019, announced that captive solar projects would be exempt from electricity duty for seven years to promote investment in such projects.</p>
<p>UltraTech Cement set up solar projects to power its cement units in Rajasthan, investing about ₹890 million (~$9.61 million). In May 2022, the government amended the policy, making the duty exemptions subject to separate statutory notifications. This effectively meant the withdrawal of the duty exemptions.</p>
<p>After the policy change, distribution companies began raising electricity duty bills for power generated from solar projects.</p>
<p>UltraTech Cement petitioned the High Court, challenging the amendment as arbitrary and as a violation of its expectations. It argued that the withdrawal of the electricity duty exemption violated well-established principles of public law.</p>
<p>The petitioner noted that the Solar Policy 2019 made a clear and unequivocal promise of a seven-year exemption from the electricity duty from the date of commissioning. Acting on this assurance, it set up solar projects, securing a vested right in its favor that the government could not later withdraw to its detriment.</p>
<p>The withdrawal of the exemption disrupted the financial viability of projects that were planned based on the promised incentive in the policy.</p>
<p><strong>Court’s Analysis</strong></p>
<p>The High Court observed that the Solar Policy 2019 contained a clear and unequivocal representation intended to attract private investment in renewable energy. In response, UltraTech Cement and others had committed substantial capital to set up the captive solar projects.</p>
<p>The Court emphasized that government policies, even if executive in nature, can create binding obligations when they induce investment.</p>
<p>Rejecting the state government’s argument that electricity duty exemptions must be granted strictly through statutory notifications under the Rajasthan Electricity (Duty) Act, 1962, the High Court held that the policy itself represented an assurance that such powers would be exercised in favor of eligible projects.</p>
<p>The Court also held that the 2022 amendment to the Solar Policy 2019 cannot operate retrospectively to deprive investors of accrued benefits.</p>
<p>While the government had the authority to modify or withdraw fiscal incentives, the Court observed that such changes must be prospective. Vested rights arising from prior assurances cannot be arbitrarily taken away.</p>
<p>On the state government’s contention that evolving economic conditions and financial constraints justified the withdrawal of exemptions, the High Court said this reasoning was insufficient, and no substantive material was presented to demonstrate overriding public interest in withdrawing the electricity duty exemption.</p>
<p>“The material on record indicates that the objectives of the Solar Policy, including the targeted solar capacity, remain unmet. In such circumstances, withdrawal of incentives appears not only unsupported by compelling necessity but also counterproductive to the very policy objectives the State seeks to advance. The invocation of public interest must be real, demonstrable, and proportionate; it cannot be a generic or post facto justification,” the Court observed.</p>
<p>This March, the Supreme Court <a href="https://www.mercomindia.com/supreme-court-upholds-generation-based-incentives-for-renewable-projects" target="_blank" rel="noopener">ruled</a> that the generation-based incentive granted to wind power generators must be disbursed in addition to the tariff and cannot be adjusted in a manner that would defeat the program’s purpose. The ruling came while dismissing an appeal filed by the Andhra Pradesh distribution companies against an order of the Appellate Tribunal for Electricity.</p>
<p>Subscribe to Mercom’s real-time <a href="https://www.mercomindia.com/product/mercoms-renewable-energy-regulatory-updates" target="_blank" rel="noopener">Regulatory Updates</a> to ensure you don’t miss any critical updates from the renewable industry.</p>


Rajasthan High Court Shields Solar Projects from Duty Exemption Rollback


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					</table><p>The <a href="https://hcraj.nic.in/" target="_blank" rel="noopener">Rajasthan High Court</a> has issued a temporary stay order on the Directorate General of Trade Remedies’ (<a href="https://www.dgtr.gov.in/en" target="_blank" rel="noopener">DGTR</a>) recommendation of imposing anti-dumping duties on imports of solar cells and modules.</p>
<p>The High Court issued the stay order following a joint petition filed by the <a href="https://rajasthansolarassociation.com/" target="_blank" rel="noopener">Rajasthan Solar Association</a> and Pratapgarh Solar Developers, opposing the DGTR’s recommendation for imposing anti-dumping duties on imports of solar cells and modules. Anti-dumping duties on solar cells and modules have a public interest impact, as they may raise solar power tariffs for consumers.</p>
<p>The High Court kept any orders passed by the respondents in the case, namely DGTR, Union of India, the Commissioner of Customs (Jodhpur), and the Assistant Commissioner of Customs (Jodhpur), in abeyance until January 5, 2026.</p>
<p>The High Court highlighted that the stay order was passed due to the paucity of time and ensuing vacations for judges.</p>
<p>The petitioner’s and respondents’ submissions will be heard on the next date of hearing.</p>
<p>In an earlier order passed by the High Court on December 15, 2025, it also asked the respondents to share an update on the anti-dumping duties recommended by the DGTR on solar modules/cells.</p>
<p>The High Court said that under Rule 17 of the Customs Tariff (Identification, assessment and Collection of Anti-Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995, the duration for completing the investigation and imposing anti-dumping duties is three months, ie, December 29, 2025.</p>
<p>The Court directed that if the central government issues a notification imposing an anti-dumping duty on imports of solar cells and modules, the notification must remain in abeyance until the next hearing date (January 5, 2026). In effect, even if an anti-dumping duty notification is issued, it will not be effective during this interim period, shielding the petitioners from immediate adverse consequences.</p>
<p>In September 2025, DGTR <a href="https://www.mercomindia.com/india-slaps-30-antidumping-duty-on-solar-cell-imports-from-china" target="_blank" rel="noopener">recommended</a> imposing antidumping duties up to 30% on imports of solar cells, whether or not assembled into modules, originating in or exported from China for three years.</p>
<p>The investigation was initiated following petitions filed by solar manufacturers alleging that the dumping of imported solar cells and modules hurt the domestic solar manufacturing sector.</p>
<p>DGTR had <a href="https://www.mercomindia.com/dgtr-opens-anti-dumping-investigation" target="_blank" rel="noopener">initiated</a> the investigation in October 2024.</p>
<p>While welcoming the DGTR&#8217;s move to <a href="https://www.mercomindia.com/will-antidumping-duties-on-cells-spark-a-new-wave-of-solar-investment-in-india" target="_blank" rel="noopener">impose</a> anti-dumping duties on imports of solar cells and modules, the solar industry highlighted the gap in domestic cell and module manufacturing capacity, which could lead to short-term supply issues for modules.</p>


Rajasthan High Court Issues Protective Order Against Anti-Dumping Duty on Solar Modules


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					</table><p>The <a href="https://hcraj.nic.in/hcraj/" target="_blank" rel="noopener">Rajasthan High Court</a> has dismissed petitions filed by the Jal Grahan Vikas Sanstha and villagers of Riwadi in the Jaisalmer district of Rajasthan, challenging the state government&#8217;s decision to allot land to SBE Renewables Ten Projects for a solar project.</p>
<p>The court directed the petitioners to pay an amount of ₹50,000 (~$639), which will be deposited with the Rajasthan State Legal Services Authority, failing which the District Collector, Jaisalmer, should take steps for recovery of the money. The court also asked the authorities to ensure no persons with vested interests obstruct the commissioning of the solar projects in the area.</p>
<p><strong>Background</strong></p>
<p>The Solar Energy Corporation of India (<a href="https://www.seci.co.in/" target="_blank" rel="noopener">SECI</a>) issued the letter of award to SBE Renewables Ten Projects to set up an interstate transmission system (ISTS)-connected wind-solar hybrid power projects (Tranche-I) of 450 MW capacity.</p>
<p>The power purchase agreement (PPA) was signed on December 31, 2019, between SECI and the solar project developer, and the project was to be commissioned within 18 months. This date was later extended to June 2022 because of the intervening situation created by the Covid-19 pandemic.</p>
<p>The state government had approved the allotment of land to the company on lease. The petitioners opposed the allotment of the land.</p>
<p>The petitioners said that the action of the district collector, Jaisalmer, to allot the land, apart from being illegal, was also highly detrimental to the areas of the Riwadi because it would adversely affect the conservation of land and obstruct the free flow and collection of rainwater.</p>
<p>The state government, in its reply, said that the entire chunk of land allotted was owned by it, and any restricted category of water bodies covered no part of it. The land allotted to the solar company was entered as &#8216;banjar&#8217; (fallow) in the revenue records.</p>
<p>The petitioners argued that the land in question was covered by prohibited categories under the relevant statutes and not available for allotment.</p>
<p><strong>Court&#8217;s analysis</strong></p>
<p>The court said there had been intentional concealment of facts by the petitioners. It observed that the petitioners had argued that the land in question comprised of catchment areas, water tanks, and ponds, and thus, under the restrictions imposed by the Rules of 2007, the land was not available for allotment.</p>
<p>The High Court rejected the contention that the land in question was in the category of restricted land</p>
<p>It also said that the village Riwadi was located in the extreme western part of the state covered under the Thar Desert. As such, no significant greenery or foliage ever existed in the area.</p>
<p>Recently, the Rajasthan Cabinet <a href="https://mercomindia.com/rajasthan-allot-land-to-adani-for-gw-solar-project/" target="_blank" rel="noopener">decided</a> to allot 2,397.54 hectares of government land in Bandha village of Jaisalmer district to Adani Renewables&#8217; special purpose vehicle — Adani Renewable Energy Holding Four, to set up a 1,000 MW solar power project.</p>
<p>Earlier, the Rajasthan High Court had <a href="https://mercomindia.com/rajasthan-high-court-cancels-allotment/" target="_blank" rel="noopener">canceled</a> the allotment of public utility land measuring 1,452 bighas (581.56 acres) near Pokhran in Jaisalmer to the Adani Renewable Energy Park.</p>
<p>Subscribe to Mercom&#8217;s real-time <a href="https://mercomindia.com/product/mercoms-renewable-energy-regulatory-updates/" target="_blank" rel="noopener">Regulatory Updates</a> to ensure you don&#8217;t miss any critical updates from the renewable industry.</p>


Rajasthan High Court Upholds Government’s Land Allotment for a Solar Project

<p>Recently, a petition filed by the Indian Wind Power Association (IWPA) had challenged the validity of the deviation settlement mechanism (DSM) regulations passed by the Rajasthan Electricity Regulatory Commission (RERC) and requested it to be scrapped.</p>
<p>The members of IWPA had pleaded that the DSM charges were high and that they were major sufferers due to unscheduled power cuts, refusal to offtake power by the state power distribution companies (DISCOMs) despite good generation during peak hours.</p>
<p>The other point of contention raised by the petitioners was that they were liable to pay high settlement charges and that the QCAs (Qualified coordinating agencies), which are responsible for coordinating between generators and state load despatch centers, lacked adequate technical expertise and that the selection of QCAs was forced on them.</p>
<p>The Rajasthan High Court reviewed the petition and has now found that the regulations were valid. In its order, the bench said:</p>
<p><em>“In our considered opinion, the requirement of wind energy generators to provide a week ahead or a day ahead scheduling is well within the powers of RERC to regulate the forecasting, scheduling, and generation of the electricity. Merely because precise forecasting is not possible or feasible as alleged by the petitioners, the provisions requiring such scheduling cannot be held as arbitrary. Similarly, the imposition of deviation charges by Regulation 18 in the event of failure to adhere to the scheduled generation can also not be declared arbitrary.”</em></p>
<p><em>“We are of the firm view that, whatever may be the source of generating the power, the principle as far as power to levy charges or fine by whatever name called on account of deviation is concerned, they have been settled and shall remain unaltered.”</em></p>
<p>As far as the QCAs are concerned, the respondents (RERC and DISCOMs) argued that the petitioners did not have any substantiating evidence in the matter. Also, they did not allow QCAs to be a part of the petition, and therefore, the QCAs could not defend themselves.</p>
<p>The high court accepted that a significant amount of technical expertise would be necessary to evaluate the finer points of the regulation. The court recommended that the petitioners should approach the RERC with their grievances, (including those which have been raised in the petition) for their redressal. The petitioners have been asked to file their petition within a period of 15 days. The court has asked the state load despatch center to refrain from recovering DSM charges until then.</p>
<p>The RERC had issued <a href="https://mercomindia.com/rajasthan-amendment-deviation-settlement-power/" target="_blank" rel="noopener noreferrer">draft amendments</a> to the 2017 regulations on deviation settlement mechanism for grid-connected power in January 2019.</p>
<p>Recently, the <a href="http://rerc.rajasthan.gov.in/main.aspx" target="_blank" rel="noopener noreferrer">RERC</a> dismissed petitions filed by captive solar project developers seeking relief from applicable wheeling and banking charges. In its order, the <a href="https://mercomindia.com/rajasthan-amendment-deviation-settlement-power/" target="_blank" rel="noopener noreferrer">commission clarified</a> whether wheeling charges should be levied on the capacity contracted or the energy wheeled.</p>
<p><a href="https://mercomindia.com/discoms-should-buy-power-re-projects-rec-2-67/" target="_blank" rel="noopener noreferrer">In October 2018</a>, the commission had released a staff paper on projects registered under renewable energy certificate (REC) mechanism in the state. It had proposed that DISCOMs should purchase the renewable power generated from such projects at the lowest pooled cost notified by the RERC since 2010, that is ₹2.67 (~$0.035)/kWh.</p>


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