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Domestic solar cell makers say use of indigenous products can keep cost of solar power low

According to reports, domestic manufacturers of solar cells have said that use of indigenous products can help keep cost of solar power low, countering the government’s claim that it will escalate after imposition of dumping duty.

“The fact is that cost of power will remain exactly the same or lesser than what was discovered through an extremely transparent bidding process of Jawaharlal Nehru National Solar Mission (JNNSM) Phase 2 Batch 1,” a senior executive of a large Indian solar cell manufacturing company said.

“From public interest perspective, it is the cost of overall energy mix which is important. Change in that will be negligible at less than 2 paisa per KwHr due to anti-dumping duty.” According to domestic manufacturers, the cost of solar power could fall and remain at Rs 7.5 per unit by 2020 if indigenous solar cells are used, compared with the Rs 6.5-8 per unit at present.

The Ministry of New and Renewable Energy (MNRE) and power producers had expressed concern that the cost of solar power would double after the commerce department said it was considering imposing high dumping duty on imports of solar cells, the bulk of which comes from the US, China, Malaysia and Taiwan.

Officials also fear that a large number of projects will get stuck due to price escalation. More than 70% of the projects across the country are built on imported solar cells and around 4,000 Mw was tendered recently. This includes 375 Mw tendered out in the second phase of the National Solar Mission in January this year.

The Jawaharlal Nehru National Solar Mission (JNNSM), announced in 2009, targets 20 gigawatts of energy generation by 2022 in three phases.

In its finding, the commerce department had indicated that imposition of dumping duty could see foreign players setting up manufacturing facilities in the country in order to capture the growing sector.

“In fact, once it is provided a level playing field, India will have a thriving domestic manufacturing industry with its entire supply chain, bringing in FDI, saving Forex, driving employment, and above all, ensure India’s energy security with a far superior energy mix,” Moser Baer Solar’s chief marketing officer Vivek Chaturvedi said, adding that this could push up India’s solar cell manufacturing capacity to 4-5 gw in two-three years.

The government, however, is not relying completely on the domestic industry because of insufficient capacity. Against India’s annual requirement of 3,000 Mw of solar cells, the country’s installed capacity is 1,260 Mw, of which only 240 Mw is operational, according to the MNRE.

“In the last bidding for solar power projects under the second phase of the National Solar Mission, the price of domestic content based projects was double of the ones based on imported solar cells. This is the reason we offered a mix of both to optimise the cost of solar power,” said a senior MNRE official.

The second phase of JNNSM was bifurcated into one based on domestically-manufactured solar cells and the other based on imported content.

The official said that in their previous presentations to the government, the domestic manufacturers have always cited the high cost of financing and solar power to gain subsidy benefits.

“But if they are able to provide cheaper solar cells, what is better than that. Our aim is to bring down the cost of solar power and also bolster the domestic manufacturing,” the official added.

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