Duties 'to shrink Indian PV market'

The PV plant in Tamil Nadu
As much as 1GW of solar projects in India could be binned as a result of the government’s decision to slap anti-dumping tariffs on PV kit coming in from foreign producers, claims the consultancy Bridge to India.

Capping weeks of feverish speculation, India’s Commerce Ministry last weekend formally recommended that the Indian government impose anti-dumping duties on foreign PV cells, ranging from $0.48/W for those coming from the US to $0.81/W for those coming from China – with Malaysian and Taiwanese kit falling in the middle.

The move will raise the price of solar energy in India by at least 10%, claims Bridge to India. Far more damaging, however, will be the hit to investor confidence.

Bridge to India believes that as much as 1GW of projects – equivalent to the whole of the Indian solar market last year – will be rendered unfeasible by the duties.

Unlike India’s controversial decision to reserve half of the capacity allocated in the National Solar Mission’s most recent tender round for projects using domestically made cells and modules, the new duties will affect all solar projects in India – including those contracted under statewide initiatives.

A relatively small group of Indian cell makers have pushed for the duties, with the investigation apparently centering on a data set from two years ago.

Indian companies focused on assembling modules will be hurt by the duties, as most are heavily reliant on imports from China. Even Indian cell makers may ultimately be damaged by the duties, Bridge to India speculates, if the overall Indian solar market shrinks as a result.

The conclusion of the dumping investigation – two years in the making – comes at an awkward time, following the election of Narendra Modi as India’s new prime minister.

Modi was elected on a pro-business platform, and has pledged to harness renewables to help modernize India’s decrepit electricity system.

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