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Local content norms for solar projects ineffective: First Solar

According to reports, emphasising that local content requirements for solar projects are “ineffective”, solar gear maker First Solar has said creating a transparent market with significant demand is the best way to promote local industry.

The comments from US-headquartered First Solar come against the backdrop of the US dragging India to the World Trade Organisation (WTO) over alleged discrimination by New Delhi’s national solar mission against American products.

First Solar has supplied equipment for over 360 MW installed solar power generation capacity in India.

“In general, our view is that local content requirement again are ineffective in promoting local industry.

“The best way to promote local industry is to create a transparent and visible market place with significant demand,” First Solar Chief Executive Officer James A Hughes told PTI in an interview here.

According to him, generally local content requirements are ineffective as it tends to drive up the cost and reduce the ability to scale the programme quickly.

“The (solar) panel is not even a majority of the cost of solar installation. Most of the cost in solar installation, even including panels, is domestic.

“So, when you reduce the size of the programme by focusing on only the local content requirement of the panel the net effect is to reduce economic activity for the domestic economy. We don’t think it is a good idea,” Hughes said.

The US Trade Representative (USTR) had alleged that India’s programme appears to discriminate against US solar equipment by requiring solar energy producers to use locally manufactured cells and by offering subsidies to those developers who use domestic equipment.

India is a key market for First Solar, which has about 20 per cent market share.

When asked about the regulatory system in the country, he said that it is relatively sophisticated.

“The Indian regulatory system or the regulatory mechanisms are relatively, they have been in place for a very long time, sophisticated,” he said.

Meanwhile, Hughes said he was not particularly worried about the notice served by government which is investigating alleged dumping of solar cells and modules in India.

“I am not particularly worried about that. We have competed on a fair basis. I believe we have provided the required information and there is no evidence that we engaged in any competitive dumping,” he added.

First Solar has received official notice from the Indian government that India is investigating potential dumping of solar cells and modules from the US, Malaysia, Taiwan and China. The company is co-operating with the Indian government and responding to its questionnaire, as per its 2012 annual report.

Going by the report, First Solar expects a final decision on the issue by end of next year, although a preliminary determination is likely to be made during the course of 2013.

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