According to reports, the government may refrain from imposing anti-dumping duty on cheap solar power gear imports, as it tries to pin down the cost of renewable energy as part of a plan to cut India’s dependence on fossil fuel.
The Directorate General of ant-dumping, who will next month will decide on a dumping case filed by some domestic manufacturers. Renewable Energy Ministry fears that the cost of solar power production will increase by at least Rs 1.6 crore per mw if anti-dumping duty is imposed on the imports, which are mainly from the US, China, Taiwan and Malaysia.
“We have requested the commerce ministry that the matter should be stayed for a while,” an official of the ministry of new and renewable energy told ET. “Around 4,000 mw worth of solar projects have been tendered. Half of the projects are under The Solar Mission and almost all the state-level projects are built on imported content. They will get stuck when the prices go up if a dumping duty is imposed.” India’s National Solar Mission was announced in 2009 with the aim to generate 20 gigawatts of energy by 2022. The plan will help cut rolling blackouts in Asia’s third-largest economy where most of the power generation is coal-based.
The government has announced a subsidy of Rs 2.5 crore per mw in the second phase of the solar programme, and invited project developers to set up solar power projects in the PPP mode with government support through viability gap funding (VGF) of 40% of the project cost. The current cost of solar power production is Rs 7-8 crore per mw.
“MNRE has done an analysis based on the viability gap funding they do for the projects. If we impose anti-dumping duty, cost will definitely go up, as we import most of it, which will mean revision of the power purchase agreements,” said a commerce department official.
The same official, however, said, “On the flip side, we are also assessing the impact of imposing a higher antidumping duty, as by that we could look at bolstering manufacturing in the country. We may incentivise foreign producers to come up and set up operations here and create jobs, like it was done 30 years ago in the auto sector.” He added that the government is yet to ascertain the quantum of import duty. “Unfortunately, we do not have the technology so we need their inputs. We are assessing the impact on the projects based on the different levels of duty,” the official said.
Domestic manufacturers of solar cells have alleged in their application to the DGAD (directorate general of anti-dumping) that the above mentioned four countries are exporting solar equipment to India at “ridiculously low prices”, due to which “local industry is bleeding”. With cheap imports flooding the Indian solar market, some big domestic players, including Moser Baer, have been forced to either shut down their manufacturing facilities or leave capacity idle by more than 50 per cent (like Lanco and Indosolar).