Solar energy firms face over 2,700 compliance obligations: TeamLease Regtech

A new report by TeamLease Regtech, a regulatory technology (Regtech) solutions company in India, reports that solar energy firms in India operate under a complex regulatory framework that requires adherence to multiple central, state and local laws. Compliance obligations span across environmental laws, grid safety regulations, taxation, licensing requirements and operational standards. One of the biggest challenges is the lack of a centralised compliance framework, making it difficult for companies to track all applicable rules.

The report, titled ‘Decoding Compliance Management for the Renewable Energy Sector,’ states that a standalone solar energy producing plant in Maharashtra where the electricity is generated and transmitted through the grid, along with a corporate office in Haryana, must comply with 799 unique regulatory obligations spread across 646 central, 153 state, and municipal requirements. These translate into 2,735 total compliance instances for a year.

Labour-related compliances make up the largest share at 244, followed by secretarial (238), finance and taxation (84), environment, health, and safety (58) and industry-specific regulations (106). These are followed by commercial (38) and general (31) compliance requirements. These are just the unique number of obligations. The total annual obligations inflate once annual frequencies of these obligations are also factored in.

A company also needs to manage obligations such as maintaining registers, making periodic payments, testing equipment, displaying statutory notices, handling audits, and reporting to various authorities.

In labour category, solar energy producers must adhere to several key labour and social welfare laws, including the Employees’ Provident Fund Act, Maternity Benefit Act, Payment of Wages Act, Sexual Harassment of Women at Workplace Act, and others. Of the 83 compliance provisions that include imprisonment, 77.1% are from the labour category, making it the most criminalised category of law.

The report states that as of April 2025, India’s solar power installed capacity stands at 107.94 GW, making it the world’s third-largest generator of solar power. In terms of generation, India produced 75.57 billion units (BU) of solar power in the first eleven months of FY24 (April 2023 to February 2024). The market size was valued at $10.4 billion in 2023, projected to reach $24.9 billion by 2030 at a CAGR of 13.4%.

“India’s renewable energy sector is thriving, fueled by robust policies and private investment. However, managing over 2,700 annual regulatory requirements at three levels of legislation and seven categories of the law requires a combination of people, process, technology, and partnerships,” says Rishi Agrawal, co-founder and CEO, TeamLease RegTech. “As the company expands its geographical footprint from a single state to multiple states, the numbers grow exponentially. Managing them in an ad-hoc, paper-based, people-dependent compliance program leaves an organisation vulnerable. 9,331 annual regulatory changes compound the problem.”

Agrawal says the first step for organisations is to raise their awareness of the regulatory obligations. Proactively monitoring regulatory updates and maintaining a detailed compliance checklist can ensure adherence.

The report states that compliance management becomes increasingly challenging as renewable energy companies scale up operations and expand into new regions. The challenges are further compounded by the absence of centralised regulatory visibility, inconsistent net metering policies across states, and lengthy approval processes requiring nearly 51 licenses and permits.

To enable ease of compliance, the report recommends fostering collaboration with regulatory and industry stakeholders, maintaining a dynamic, digital compliance checklist, proactively tracking legal and regulatory changes, and conducting sector-specific due diligence and risk-based audits. It also emphasises the importance of building a strong culture of compliance driven by leadership and leveraging digital tools to streamline processes, enhance visibility, and reduce operational risk.

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