The mandatory use of domestic content for utility scale grid connected solar power is a topic that has witnessed a lot of debate and there have been strong views on both for and against the same sometimes from two group companies each on one side of the same corporate house.
The local domestic content requirements mandates that solar panels will have to be produced in India for the first year and solar cells will also have to produced from the second year.There is also talk that this will be extended to solar inverters as well.
Panchabuta had reported recently, that 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.
This immediately led the ministry to issue a clarification, as reported by Panchabuta, that stated, “Under the Jawaharlal Nehru National Solar Mission, the Government had announced a policy to introduce domestic content wherein 30% domestic content is mandatory for the solar thermal power projects in the first phase of the Mission. Solar Photovoltaic (PV) grid power projects are to be selected in two stages. In the first stage 150 MW capacity projects are being selected, where the crystalline silicon modules should be manufactured in the country. However, for the second stage of selection of about 300 MW capacity projects, it is mandatory to use domestic solar cells and modules. There is no move to defer this policy. “
Now, according to this report in Wall Street Journal, U.S. government officials and companies are pushing India to remove its restrictions on imports of solar technology, regulations they say threaten to cut American firms out of a promising market as India embarks on a major rollout of solar power.
……On a recent trip here, President Barack Obama noted the potential for the U.S. and India to deepen collaboration in alternative energy. India’s solar program, which aims to spend tens of billions of dollars to subsidize the generation of 20,000 megawatts of power by 2022—one of the most ambitious solar projects in the world—was expected to jump-start that collaboration.
……..Instead, the initiative has spawned what is fast becoming a trade dispute. India announced Tuesday it has selected 30 companies to receive government subsidies for generating solar power. But those firms are barred for the next several months from importing certain types of solar panels, which convert sunlight into electricity, and will face a complete import ban starting in April.
U.S. firms such as First Solar Inc. and SunPower Corp. are among the world’s largest suppliers of solar panels, along with Chinese companies such as Suntech Power Holdings Co. and European firms like German’s Q-Cells SE. Senior U.S. government officials have raised concerns about the trade restrictions with their Indian counterparts and have urged India to relax them, people familiar with the discussions say. Top Indian officials say they have no plans to relax the current restrictions or hold off on the upcoming full ban.
…….A spokesman for the office of the U.S. Trade Representative said that “limiting access to high-quality solar equipment that is available outside India is likely to only frustrate” India’s plans to boost solar power production and “discourage further investors from developing solar projects in India.”
Gauri Singh, an official in charge of the program in India’s Ministry of New and Renewable Energy, said India plans to spend $20 billion in the first few years of the program, and it is natural that it wants the benefits to accrue at home. “You don’t put in that kind of money unless you can say it’s going to bring manufacturing into the country and jobs into the country,” Ms. Singh said.
She added that under the policy, foreign companies are allowed to set up manufacturing facilities in India through joint ventures.
Some U.S. and Indian solar-power developers say they believe the rules are aimed at protecting two Indian companies, Moser Baer India Ltd. and Tata BP Solar India Ltd., a joint venture of Tata Power Co. and BP Solar International Inc., which, they argue, don’t produce a wide enough range of highly efficient solar panels for power generators.
Bryan Ashley, co-chairman of a task force that represents U.S. solar companies, and chief marketing officer of Suniva Inc., a Norcross, Ga., photovoltaic-cell maker, says the import restrictions will cut off Indian solar companies from advanced technologies. “This has been pushed by some in the Indian industry to give themselves a monopoly,” he said.
Sindoor Mittal, who is running solar projects for Welspun Energy Ltd., an Indian firm that is planning to build plants with 500 megawatts of capacity in coming years and that was selected to receive government subsidies, says some advanced technologies, such as so-called thin-film solar cells, aren’t available in India.
“India is nowhere in the list of global manufacturing leaders” in solar technology, she says.
This is getting very interesting and as Panchabuta has reported, there are various arguments that have been brought up both for and against the domestic content requirements with almost all developers against the domestic content requirements and all Indian manufacturers for the requirement.