India reconsidering solar duties as government opens PV floodgates

Indian Power Minister Piyush Goyal has this week issued a plea to the country’s Ministry of Commerce and Finance to reconsider its stance on the imposition of dumping duties applied to imported solar equipment from the U.S., China, Taiwan and Malaysia.

In a dramatic appeal to decision makers operating at the highest echelons of government, the power ministry hopes to reverse a decision put in place by the previous government on May 22, which is at odds with new Prime Minister Narendra Modi’s pro-solar stance.

The proposed tariffs, ranging from US$0.11 cents/W to $0.81 cents/W, could more than double the cost of solar panels, cells and modules imported from Chinese, American, Malaysian and Taiwanese suppliers. With approximately 80% of India’s built PV capacity comprised of solar equipment from these countries, according to Bridge to India, the Ministry of New & Renewable Energy has warned his colleagues in the commerce and finance ministry that domestic suppliers are unable to keep pace with demand, and would certainly fail to satisfy the government’s plans to quadruple PV capacity over the next three years.

"As things stand today, India doesn’t have adequate manufacturing capacity to support the kind of thrust we want to give to solar," said Goyal. "We have requested the commerce ministry and finance ministry to reconsider."

Meanwhile, Nitin Gadkari, India’s Transport Minister, has warned that dumping duties would more than double the cost of solar power in the country at a time when Modi’s pro-solar stance is just beginning to take root.

One-and-a-half-years in the making, India’s probe into cheap solar cells being dumped in the country concluded that a restrictive duty be imposed in order to protect the interests of the domestic manufacturing industry. The decision was met in parts with outcry, in others with support. However, with a target of adding 20 GW of solar PV capacity to the grid by 2022, India can ill-afford to stymie its supply line, nor impose measures that will increase costs at a time when solar system prices are falling almost everywhere else.

The Ministry of Finance had planned to introduce the duties on August 22. Whether Goyal’s latest plea will force the ministry to change its mind remains to be seen.

Going for the gigawatts

India’s solar ambitions – thus far pegged to an undulating rollercoaster full of peaks and troughs – have been set high since Modi came into office. The government’s support for solar has filtered down to state level and below, and pro-solar stances abound throughout the country.

In the Telangana state the local government has announced plans to implement a 1 GW solar PV park in the district of Mahbubnagar. The project will be overseen by Telangana Industrial Infrastructure Corporation in partnership with the Solar Energy Corporation of India (SECI), which has already given preliminary approval for the park.

Bidding is also about to get underway for the country’s largest solar power project auction to date, with 1.5 GW of PV projects available for funding under Phase 2 of the Jawaharlal Nehru National Solar Mission (JNNSM). The bidding is part of a wider goal to add 10 GW of solar PV capacity by 2017, and follows a government-backed 750 MW tender launched in January. All solar power added during Phase 2 is set to be bundled with the existing unallocated quota of conventional power, and sold at an average rate to India’s power distribution companies.

Allied to domestic and government support, foreign investment in India’s solar industry has gathered pace in recent months, too. This week, Cypriot solar PV solutions provider Concept Solutions & Innovation announced that it had funded India’s CaptureSolar Energy (CSEL) to the tune of $125 million in backing a new 90 MW solar PV plant in Pune.

"We plan to set up a 90 MW solar park in Pune, and for this we have received funding of $125 million from Concept Solutions & Innovation for the first 75 MW," said CSEL CEO Raju Bhosale. In addition to financing, Concept Solutions will also provide technology solutions for the project, which is expected to be commercially operational by March next year.