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India hit by China’s solar energy war

According to reports, not withstanding the economic slowdown, several countries across the globe are engaged in a bitter fight for firmer control over solar energy – a key energy source in future.

The epicentre of the war is China, which has flooded the global market with its cheaper variants of solar equipment. However, the major economies are trying to hit back using trade restrictions.

The year 2012 witnessed the US announcing its anti-dumping tariff against Chinese manufacturers, which was followed by the European Union’s restrictions against Chinese solar equipment. But China hit back soon after with the announcement of its own anti-dumping case against the poly-silicon suppliers from the US, EU and South Korea.

Now, India has also been hit by this syndrome.

The US has threatened to take India to World Trade Organisation (WTO) regime for prescribing conditions for domestic use of solar technology under its flagship Jawaharlal Nehru Solar Mission. The US is already financing projects under the mission provided they source the equipment from the US-based companies.

India has become part of the fierce trade battle by initiating anti-dumping proceedings against manufacturers from China, Malaysia, Taiwan and US. “Around 60% of Indian solar market is occupied by equipment coming directly from China or other countries such as Malaysia and Taiwan,” a senior official said.

Raj Prabhu – co-founder of Mercom Capital Group, a Bangalore solar energy consulting firm – said anti-dumping cases and protectionist measures became too common across the world as countries tried to rescue their own manufacturers in the face of massive over supply and falling prices.

The solar energy generation prices in India had halved in the last five years with equipment getting cheaper. However, despite the fall in price, the solar energy market had witnessed around 27% rise in 2012.

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