New Delhi: India has set up a team to certify all solar power generation equipment makers who want to do business in the world’s largest green energy market. The move aims to boost domestic manufacturing and protect its domestic companies from cheap and sub-standard imports.
Manufacturers are lining up for certification as the implementation of the new solar power generation equipment sourcing guidelines will start on 1 April.
At play is India’s renewable energy programme, which would require $80 billion in investments till 2022.
This figure will grow more than three-fold to $300 billion during 2023-30. India imported $2.16 billion worth of solar photovoltaic (PV) cells, panels, and modules in 2018-19.
Only manufacturers and solar modules who are approved by the Bureau of Indian Standards (BIS) and the ministry of new and renewable energy (MNRE) and are on the approved list of modules and manufacturers (ALMM) will be eligible for government supported schemes, including projects from where electricity distribution companies procure solar power for supply to their consumers, according to the Centre’s directive.
The move, which is being seen as a non-tariff barrier, will ensure compliance by a majority of domestic and global manufacturers, including Chinese majors, and thus help maintain quality by avoiding the use of low-quality imported equipment.
The fast-growing domestic market for solar components is dominated by Chinese companies because of their competitive pricing. The surge in imports led the government in its previous term to impose a safeguard duty from 30 July 2018 on solar cells and modules imported from China and Malaysia.
Mint reported on 7 September 2017 about poor quality Chinese solar modules, rejected by developers being sold in the domestic market at a discount. Modules account for nearly 60% of a solar power project’s total cost.
“The Indian government will inspect whether the manufacturer is making on its own. We will protect our industry. After they meet our standards, we will put them on the ALMM list. This will be applicable to all manufacturers situated in India or overseas. There are BIS standards and a team has been constituted by the ministry to inspect such facilities. Applications have started coming," said MNRE secretary Anand Kumar.
Clean energy projects now account for more than a fifth of India’s installed power generation capacity, with the country becoming one of the top renewable energy producers globally with ambitious capacity expansion plans. However, global investors are concerned about the Andhra Pradesh government’s decision to have a relook at renewable energy contracts.
The move by the Centre will also check the practice of some manufacturers claiming production of cells and modules that have been produced elsewhere.
The MNRE team will inspect the manufacturing facility and conduct the production and sale audit before it includes modules and manufacturers in the ALMM list for two years, according to government documents reviewed by Mint. A similar scheme, the Registered List of Models and Manufacturers, exists for the Indian wind energy sector.
India has a domestic manufacturing capacity of 3 gigawatts (GW) for solar cells and 10GW for wind power equipment.