India is looking at ways to support domestic manufacturers of solar cells and modules as it aggressively increases installed capacity.
According to media reports, the Ministry of New & Renewable Energy plans to auction 20 gigawatts of solar power capacity with a clause that would give preference to companies that have manufacturing facilities. The ministry may opt for several different tenders with a cumulative capacity of 20 gigawatts.
Details of the terms and conditions of these tenders will be out once the Solar Energy Corporation of India (SECI) issues the tender. However, this could be the make-or-break moment for solar equipment manufacturers in India.
The Indian government has attempted several measures to make sure that Indian manufacturers benefit from the huge capacity addition targets.
The Indian government did manage to auction a few hundred megawatts of capacity under the Domestic Content Requirement (DCR). During the early days of the National Solar Mission, some tenders had a clause that required developers to use only Indian-made solar modules.
Neither the central nor state governments are allowed to float such tenders anymore after the US successfully challenged DCR and won a ruling from the World Trade Organisation in September 2016.
The MNRE also proposed a financial support scheme for solar manufacturers. The ministry planned a $3 billion relief package for manufacturers. The plan included various financial incentives, including subsidised interest rates. The plan, however, was disapproved by the Ministry of Finance.
Duties on Imported Modules
India first considered levying anti-dumping duties against imported solar cells and modules in 2013. The Ministry of Commerce and Industry, after internal investigations, proposed anti-dumping duties to Ministry of Finance. The new government that came to power in May 2014 rejected these recommendations.
Last year, fresh investigations were launched into imports from China, Taiwan, and Malaysia. These investigations were recently terminated after the Indian Solar Manufacturers Association (ISMA) withdrew its petition. ISMA will likely submit a fresh petition soon.
The Indian government also levied custom duties on solar modules for a brief period. These duties were recently lifted following re-classification of solar modules. Imposition of safeguard duties has also been recommended by a government agency.
Such a tender will likely benefit the largest solar cell and manufacturers in India that also have project development capabilities. These include Adani Energy, which already operates India’s largest solar power project, and Tata Power Solar, which acquired around 1 gigawatt of solar and wind energy capacity from Welspun Energy.
Photo Credit: Zachary Shahan / Solar Love