The Government of Nepal has eased environmental assessment requirements for solar photovoltaic (PV) projects, raising the threshold for mandatory Environmental Impact Assessments (EIA) to align with hydropower projects.

Under the amended regulation, solar projects in the Hilly Region exceeding 50 megawatts (MW) and in the Terai Region exceeding 40 MW will now require a full EIA. Previously, the threshold stood at just 10 MW nationwide, a limit that the solar industry had long argued placed an undue regulatory burden on medium-scale projects.

The Solar Power Producers Association of Nepal (SOPPAN) welcomed the decision, describing it as a “long-awaited and pragmatic reform” that will accelerate investment and development in the renewable energy sector. SOPPAN said the policy change was among the key issues raised during its meeting with Minister of Energy, Water Resources and Irrigation Kulman Ghising on September 26, 2025.

“This alignment removes disproportionate regulatory barriers for medium-scale solar projects and brings parity between solar and hydropower,” SOPPAN stated, adding that the new thresholds would make the approval process faster and more cost-effective for developers.

Expected Impact

According to SOPPAN, the change is expected to:

- Simplify approval processes and reduce delays for projects in the 10–50 MW range.

- Create a level playing field between solar and hydropower.

- Attract more domestic and foreign investment by ensuring regulatory predictability.

- Support Nepal’s broader goal of expanding energy capacity to meet domestic
demand and export power to neighboring BBIN countries.

SOPPAN also expressed gratitude to Minister Ghising and the interim government for “understanding the comparative processes for hydro and solar development” and for taking “decisive action to fast-track energy project development.”

The organization reaffirmed its commitment to work with the Ministry and relevant agencies to implement the new EIA rules and advance sustainable solar energy development across Nepal.