New Delhi: State-run NTPC Ltd on Monday deferred a tender for 2,000 megawatts (MW) solar power by a week as local companies started to feel the effect of a safeguard duty on solar cell and module imports from China and Malaysia, said two people aware of the development.

The postponement of reverse auction by India’s largest power generation utility was triggered by concerns among pre-qualified bidders on the impact of the safeguard duty on their financial models.

The solar developers had submitted technical bids to participate in the reverse auction ahead of the imposition of the safeguard duty on 30 July.

To be sure, this is the second time that the auction has been deferred.

“This is the first interstate transmission system (ISTS)-connected solar auction by NTPC that has now been deferred to 14 August over safeguard duty concerns which will impact tariff to the tune of around 35-40 paise per unit," said one of the two people cited above, requesting anonymity.

India achieved a record low solar power tariff of 2.44 per unit in May 2017. Earlier last month, tariffs again touched 2.44 per unit in an auction conducted by state-run Solar Energy Corp. of India.

“Representation was made to NTPC to defer the auction given the uncertainty introduced by the safeguard duty," said the chief executive officer of a New Delhi-based company that prequalified to bid for the auction, who requested anonymity.

With modules making up nearly 60% of a solar power project’s total cost, a majority of Indian developers have placed orders with Chinese manufacturers because of their competitive pricing.

When contacted, an NTPC spokesperson declined comment.

For China’s solar module manufacturing capacity, estimated to be around 70 gigawatts (GW) per year, the major markets are the US, India and China itself.

“We have given one-week extension because certain formalities need to be completed internally. It was earlier deferred as well when there was no issue of safeguard duty," said a senior NTPC executive, seeking anonymity.

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