India confident of achieving solar targets at affordable tariffs despite levying safeguard duty

New Delhi: India remains confident that the imposition of safeguard duty on solar cell and module imported from China and Malaysia will not impact its marquee solar power programme, said Anand Kumar, secretary in the ministry of new and renewable energy.

This comes in the backdrop of state-run NTPC Ltd. on Monday deferring a tender for 2,000 megawatts (MW) solar power by a week. 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.

“We will definitely not only meet the target but will also extend it. We would also work towards assuring it at affordable rate to the people,” Kumar told Mint in a phone interview.

India achieved a record low solar power tariff of Rs 2.44 per unit in May 2017. Earlier last month, tariffs again touched Rs 2.44 per unit in an auction conducted by state-run Solar Energy Corp. of India. Analysts believe that imposition of safeguard duty will upwardly impact tariff by about 30-35 paise per unit.

In response to a query about whether imposition of safeguard duty will impact India’s solar power plans, Kumar said, “No, it will not impact the bid process. Developers will factor this in their bids.”

Kumar’s ministry has also requested the finance ministry to exempt those solar projects that have been bid out by 30 July, the day safeguard duty was introduced was introduced on the recommendations of Directorate General of Trade Remedies (DGTR) by the finance ministry. 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 ambitious target of putting in place 175 gigawatt (GW) of clean energy capacity by 2022 as part of its global climate change commitments. Of India’s plan to add 100GW of solar power capacity by 2022, 40GW is to come from rooftop projects.

Experts believe that the bid related issues 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. 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,” said Vinay Rustagi, managing director at consulting firm Bridge to India.


Sourced – Utpal Bhaskar, 07 Aug, 2018

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