The Indian solar module market is dominated by Chinese firms, with most solar power developers been sourcing solar modules and equipment from China, where they are cheaper.
New Delhi: India is confident of achieving its ambitious target of 100 gigawatts (GW) solar power by 2022 despite the imposition of a safeguard duty on imported solar components, said the top bureaucrat in the ministry of new and renewable energy.
“We will definitely not only meet the target but will also exceed it. We would also work towards assuring it at affordable rate to the people," Anand Kumar, secretary in the ministry, told Mint in a phone interview.
The government’s assertion comes amid state-run NTPC Ltd on Monday deferring by a week a tender for 2,000 megawatts (MW) solar power.
The fast-growing Indian market for solar components is dominated by Chinese companies due to their competitive pricing. The surge in imports led the government to impose a safeguard duty from 30 July on solar cells and modules imported from China and Malaysia.
India achieved a record low solar power tariff of ₹ 2.44 per unit in May 2017. In July, tariffs again touched ₹ 2.44 per unit in an auction conducted by state-run Solar Energy Corp. of India. Analysts believe tariffs will rise about 30-35 paise per unit due to the new duty.
Kumar said, however, the safeguard duty won’t hit India’s solar plans as developers will factor the higher cost in their bids. India had 21.65GW of solar capacity as of end-March.
The renewable energy ministry has also requested the finance ministry to exempt solar projects that have been bid out by 30 July, the day safeguard duty was introduced on the recommendations of Directorate General of Trade Remedies. A safeguard duty of 25% has been imposed for the first year, followed by a 5% reduction for the first six months of the second year to 20%. A duty of 15% has been levied for the last six months of the second year.
India, the world’s third-largest energy consumer after the US and China, is running the world’s largest clean energy programme with an aim of having 175GW of clean energy capacity by 2022 as part of its global climate change commitments. Its plan to add 100GW of solar capacity by 2022 includes 40GW from rooftop projects.
Experts believe issues concerning solar tenders may take some time to resolve.
“The problem is that while safeguard duty has been announced, complete clarity is still not available on the exact mechanics and applicability," said Vinay Rustagi, managing director at consulting firm Bridge to India. “Some of the ongoing tenders are stuck as a result because bids were submitted before duty decision but auctions will happen after the decision date. This uncertainty may last for a few more weeks, unfortunately."
Subscribe to Mint Newsletters
* Enter a valid email
* Thank you for subscribing to our newsletter.
Never miss a story! Stay connected and informed with Mint.
our App Now!!