Standalone solar plant subject to 2,735 compliance tasks, 83 clauses carry imprisonment: Report

New Delhi: A standalone solar energy producing plant in Maharashtra, with a corporate office in Haryana, must comply with 799 unique obligations, resulting in 2,735 total annual compliance tasks, according to a report released by TeamLease RegTech.

Of the total obligations applicable to the corporate office, 83 carry imprisonment clauses, the report titled Decoding Compliance Management for Renewable Energy Sector stated. The report highlights that these obligations span central, state and municipal levels, and are distributed across seven categories of law and three tiers of legislation.

"The corporate office must adhere to 514 compliances, of which 83 carry imprisonment clauses, often for procedural lapses," the report said.

The compliance load is broken down into 646 obligations from central legislation, 151 from the state level, and two from municipal regulations. The manufacturing plant component alone requires 51 approvals, permissions and registrations, and must comply with 285 legal mandates. These obligations arise across categories including safety, employee welfare and statutory audits.

The regulatory framework involves multiple agencies including the Central Electricity Regulatory Commission (CERC), State Electricity Regulatory Commissions (SERCs), and the Bureau of Energy Efficiency (BEE). Obligations include adherence to Renewable Purchase Obligations (RPOs), Energy Conservation Act, tariff policies, environmental clearances, and grid integration standards in accordance with Central Pollution Control Board (CPCB) norms.

Compliance challenges identified in the report include fragmentation across jurisdictions, overlapping mandates from different authorities, inconsistent policy implementation, and delays in land acquisition and environmental clearances. The continued reliance on manual, paper-based compliance systems also increases the risk of non-compliance, it said.

The 799 obligations are spread across categories such as labour (244), secretarial (238), industry-specific (106), finance and taxation (84), environment health and safety (EHS) (58), commercial (38), and general (31).

In terms of frequency, these include 58 monthly, 94 quarterly, 45 half-yearly and 114 annual compliances. The remaining 88 are event-based or one-time obligations.

"The regulatory landscape circumscribes various standards, authorities and compliance requirements," the report noted. It further explained that the complexity is increased by the concurrent jurisdiction of central and state governments in areas like labour and electricity.

The report detailed that approvals required to establish and operate the plant cover stages such as setting up (10), pre-commissioning (7), post-commissioning (4), and ongoing operations (30), totalling 51 approvals. These are governed under at least 31 Acts and Rules.

Imprisonment clauses linked to compliance requirements are most prevalent under labour laws, accounting for 77.1 per cent, followed by secretarial (12 per cent), finance and taxation (8.4 per cent), and EHS (2.4 per cent). In terms of legislative origin, 66.3 per cent of these clauses stem from central laws, while 33.7 per cent are from state laws.

The report further highlighted that the compliance types include returns, registers and records, payments, certificates and licenses, notices and correspondence, inspections, safety and welfare, audit and accounts, and others.

The company under consideration has 100 or fewer employees and employs more than 20 contract labourers in the factory. It uses diesel generators, fire extinguishers, and consumes batteries at both manufacturing and corporate locations. It also generates e-waste, battery waste, and solid waste, with operations based on zero liquid discharge.

The report recommends that renewable energy companies adopt a centralised and automated compliance strategy to manage obligations more efficiently.