Indian subsidy regime has $530m backlog

In the wake of a Mercom Capital survey that showed Indian businesses and households have a low awareness of the renewables subsidy program offered by their government, newly-appointed energy minister Piyush Goyal could be forgiven for breathing a sigh of relief.

A report in yesterday’s Times of India newspaper stated the man charged by new prime minister Narendra Modi with bringing the frequently sparring power, coal and renewable energy departments under one roof, is seeking to address a sizeable backlog in subsidy payments left by the previous regime.

Indian panel manufacturers were offered a 30% subsidy by the previous United Progressive Alliance coalition government, under the terms of the national Jawaharlal Nehru National Solar Mission which, in 2010, was unveiled to secure 20 GW of solar in India by 2022.

But manufacturers have complained about non-payment of the promised subsidy and the Times says Modi’s Bharatiya Janata Party government has inherited an INR3,200 crore ($536 million) backlog at the ministry of new and renewable energy, which Goyal is keen to clear before a possible overhaul of the subsidy regime.

Great things are expected of Modi’s regime after the leap forward in solar under his stewardship as chief minister of Gujarat state but with the Times quoting an energy ministry source as saying: "It can’t be anyone’s case that you make a policy and keep promising something but can’t keep your promise. The idea is to get a fix on the amount of money available for subsidy," those hopes may be misplaced.

Any reduction in subsidies would be a body blow for beleaguered solar manufacturers still reeling from what they claim are the injurious effects they have suffered from the dumping of Chinese, Taiwanese, Malaysian and American cells and modules in the country, a claim backed up by the Indian ministry of commerce’s recently completed anti dumping investigation.