Push for India to broaden PV probe

A trio of Indian solar manufacturers is pressing for the government’s ongoing investigation into alleged dumping of PV cells from China, Taiwan and the US to be expanded to include the EU and Japan.

In late 2012 Ministry of Commerce formally opened an investigation of cells from the US, China and Taiwan seemed to bolster the plaintiff’s case, with the first hearings in that case held last week.

A broadening of the investigation to include the EU and Japan would add yet another layer of complexity and uncertainty to the otherwise burgeoning Indian PV market.

In the eyes of those opposed to the tariffs, the plaintiffs – Indosolar, Jupiter Solar and Websol Energy System – are merely seeking to ride the coattails of the deepening global PV trade war to secure protection within their domestic market.

The plaintiffs, however, argue that an integral part of Delhi’s enormous commitment to solar energy – namely the fostering of local manufacturing jobs – has been severely undercut by the importation of cheap modules from the US and China, which in most cases come with cheaper financing than is available to developers using Indian modules.

The first public hearing in the case involving US, Chinese and Taiwanese suppliers took place last week in Delhi, drawing participants from around the world. The government is due to decide whether to impose anti-dumping duties – future and retroactive – in late August.

Thin-film PV kit would also be affected, with important consequences for First Solar.

As it has in the EU and the US, the case has split opinion in the Indian solar sector – with developers and EPC contractors, many of which benefit from cheaper modules, lining up against the duties.

Vineet Mittal, chief executive of Welspun Energy, argues that Indian manufacturers are struggling to compete because they “invested in archaic technology”.

Even some manufacturers oppose the duties. Vikram Solar, one of India’s largest module makers, has said that there is simply not enough cell capacity in India – let alone capacity which is competitive on price and quality – to feed the country’s booming demand for PV.

The fact that India is desperate for new generation capacity further crimps the argument for duties.

However, it will be difficult for India to simply sweep the case under the rug, given the definitive findings in the US and preliminary findings in the EU that Chinese producers did indeed dump product into those markets.

One issue that may potential derail the case is the relatively small size of the three plaintiffs. Under Indian law, the companies petitioning for dumping duties must collectively control at least 25% of the market – a level which the plaintiffs may not hold in this case.

Indosolar is in the process of more than doubling its 160MW of cell capacity in Uttar Pradesh; Websol maintains 120MW of cell capacity in West Bengal; and Jupiter Solar has 50MW of cell capacity in Himachal Pradesh. India added nearly 1GW of PV capacity last year.

Delhi has a target of having 4-5GW of PV manufacturing capacity in place by 2017.

India has some domestic-content rules in place for PV kit, and is set to continue expanding and fine-tuning those restrictions, but they only apply to those projects compensated under the National Solar Mission, and a loophole has existed for foreign thin-film modules.

Separately, Tata Power today announced it will build a 28.8MW PV array in Maharashtra state by the end of the year, nearly doubling its PV capacity in India.