The letter, sent to both the Ministry of New and Renewable Energy and Solar Energy Corporation of India (SECI), accuses local-made technology of lacking quality and efficiency while offering little value for money. The letter makes allegations and observations about the Indian market, following what it claims to have been a meeting between the federation, the Ministry, and SECI in December of last year.
The letter, signed by Deepak Gupta, director general of the federation, states, "Actual domestic cell manufacturing capacity available for current batch of NSM projects is far less than the claims made by domestic cell manufacturers. The operational capacity is not more than 100-150 MW/annum against the boiler plate / installed capacity of 500-700 MW. Most of the non-operational plants have very limited potential due to vintage equipment and technology and most of the Operational Capacities have also been unused or lying idle for quite some time. This would mean that not more than 30-35% of the projects will be completed."
The letter also takes up issues with financing, saying that lenders are reluctant to engage with the market due to "perceived quality issues".
The federation's letter states most ominously, "However, the most distressing and worrying feature is a supposed cartelization by some of the larger domestic cell manufacturers. Taking advantage of the procurement compulsions imposed by the Phase II conditions of domestic content, bidding having been completed and strict time limits having been imposed, the manufacturers have increased cell prices by a whopping 6-8 US$ cents/Wp within few days of award announcement. This has made the Module Manufacturers increase the price per Wp by close to 15-16% than the initial quotes before bidding. This has made DCR projects economically unviable. With this attitude many of the developers are rethinking if they would like to do the projects under DCR category itself and debating if they should sign the PPA or not."
Further on, the letter adds, "Surely the government did not visualize a situation where opportunities like this would be taken advantage of to extract higher prices. This is completely unethical and will completely erode trust with serious implications for the future. In view of the current cartelization behavior of domestic manufacturers, it has become impossible for developers to execute DCR projects. This is a serious threat to the Solar Mission."
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In consideration of these factors, the federation has asked for the implementation timeline of DCR projects to be extended from 13 to 24 months following PPA signing.
The complaint comes among the government's quest to create 375 MW of solar photovoltaic power through domestic cells. The second phase of the Jawaharlal Nehru National Solar Mission called for bids to set up 750 MW of solar projects.
The letter comes against a tumultuous backdrop for the Indian solar industry. The country is undergoing an ambitious building project, with the Ministry of New and Renewable Energy setting in September 2013 a solar target of 10 GW by 2017. Previous ambitious goals of having 22 GW of PV installed in the country by 2022 have been met with currency devaluation of 20% and planned projects hitting a bottle-neck with the end of the second phase of the Jawaharlal Nehru National Solar Mission.
The National Solar Federation of India is composed of manufacturers and stakeholders in the solar industry. It was set up in May 2013. SECI, the recipient of the Federation's letter, is a public sector company set up to drive solar power in the country.
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