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Mandatory use of local cells for solar projects under National Solar Mission may be deferred in India

According to reports emerging in the media today, the government may postpone mandatory use of locally made photovoltaic cells in solar power projects being set up under the national solar mission to speed up projects and allow access to the best-available technology although the move would be a blow to local suppliers such as Moser Baer, Tata BP Solar, KSK Surya and IndoSolar may suffer.

The topic of domestic content has witnessed a lot of debate and there have been strong views from both sides of the table.

The Jawaharlal Nehru National Solar Mission (JNNSM) had finally made a policy decision that the use of domestic content had been made mandatory in the case of modules in its first phase of bidding and this clause is proposed to be made mandatory for photovoltaic cells from next financial year.

According to reports, the secretary ministry of new and renewable energy (MNRE), Deepak Gupta said, “We will consider mandatory clause for photovoltaic cells only after evaluating progress on projects that have been bid in the first round. If need arises, we may postpone its implementation to allow for more global technologies to come into the Indian market.”

It is generally agreed that had the mission allowed for import of module, the Indian producers would have found it very tough to compete with  imports.

In this context some of the arugments from the domestic players include the life of plant, reliability of Chinese suppliers,performance issues etc.

“Solar power projects will have 25 year power purchase agreements (PPAs) and government should ensure the plants actually deliver power over that long period and that it has legal recourse in case of poor or non performance. This will be difficult to ensure in case non Indian products are used,” Tata BP Solar CEO K Subramanya.

“Buy domestic provision will not only give fillip towards making India a state-of-the-art technology manufacturing solar hub, but also create a more inclusive ecosystem that will generate employment ,” said an official of the Moser Baer asking not to be named.

On the other side, there have been recent reports including those from another Tata group company, Tata Power where the executive director of strategy and business development, Banmali Agrawala said “Also, you’re not allowed to import equipment. As an owner, I’d like to discover what is the least possible price in the global markets.”

Now with this announcement seems like MNRE has decided to take a wait and watch approach and to incorporate the developments and happenings  from the first round into the process ahead, once again being open and receptive to the overall development of the National Solar Mission.

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