Thin film loophole to be closed in India

10. May 2013 | Applications & Installations, Global PV markets, Industry & Suppliers, Markets & Trends, Investor news | By:  Max Hall

A loophole in the commissioning of solar projects under India's Jawaharlal Nehru National Solar Mission (NSM) which allowed developers to bypass domestic content requirements is set to be closed.

A satellite map of India.

Reports claim the loophole allowing thin film to bypass Indian domestic content requirements is about to be closed.

News agency Bloomberg says the joint secretary of the country's Ministry for New and Renewable Energy, Tarun Kapoor, stated the loophole relating to thin film would be closed for the 750 MW first batch of Phase II of the NSM.

Previously India's controversial domestic content requirement, which stated a percentage of solar cells and modules must be manufactured in the country, applied only to traditional multicrystalline panels.

The omission of the rule to thin film technology largely explains the popularity of thin film panels in projects to date but that seems set to change, potentially hitting U.S. thin film manufacturers like First Solar in a market where the technology was managing to hold off the challenge of cheap imported multicrystalline Chinese imports.

The draft guidelines for the selection of the latest batch of projects under the NSM, issued last month, make no mention of the inclusion of thin film but do mark a change in financing aid for developers.

The Indian government previously enticed developers with the prospect of above market payments for solar energy. Now the tariff paid will be fixed at INR5.45/kWh (US$0.10/kWh) for the 25-year PPAs with the possibility of a 10% reduction.

Instead the Indian government is offering grants to developers under its Viability Gap Fund, which will supply up to 30% of project costs or INR25 million, whichever is lower.

As usual, though, there are caveats, such as the fact the developers with the lowest Viability Gap Fund requirements will win the tenders.

The guidelines also state that developers must put in at least INR15 million of their own funding.

The Bloomberg report states Mr Kapoor predicted the next 800MW NSM auction would be held sometime around September.

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