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Anti-dumping duty on solar gear unlikely to reduce imports

According to reports, in a setback to the government’s bid to encourage domestic solar cell industry, solar power project developers have told the government that they would continue to import solar cells from different countries and would not source domestically, if an anti-dumping duty on solar gears is imposed.

In May, the Directorate General of Anti-Dumping had recommended imposing high anti-dumping duty on solar imports coming from China, the US, Malaysia and Taiwan. To circumvent the anti-dumping duty, manufactures say they will now import from countries that don’t attract the duty, such as Japan and South Korea, which manufacture “better quality solar cells” than Indian manufacturers.

“The power producers have conveyed that they have an option of buying solar cells from Japan, South Korea, Singapore, Canada, Germany, Italy and France, which cumulatively manufacture around 6,000-8,000 Mw a year. Indian manufacturers don’t have the capacity to meet the demand of the growing solar power production industry,” said a senior official with the Ministry of New and Renewable Energy (MNRE).

According to the recent MNRE data, out of the installed manufacturing capacity of solar cells of 1,260 Mw, only 240 Mw is operational, while India’s annual demand is 3,000 Mw. This is slated to go up with about 4,000 Mw of solar power projects tendered recently across the country. According to the data shared by the solar power producers, the cost of Chinese solar cells is 58-61 cents per watt, which is set to go up to $1.20 per watt, once the anti-dumping duty is imposed. Indigenously-manufactured cells cost 44-48 cents per watt. Power producers say the cost of cells coming from Singapore, the US, Canada, Japan and European Union countries would cost between 75 and 90 cents.

“Even though they (imported solar cells) cost more, their quality is better. The whole issue being racked up by domestic manufacturers stands wasted then because the power producers would prefer imports as the domestic industry cannot meet their growing demand,” said a senior executive of solar power production company.

The domestic manufacturers are, however, of the view that the cost of solar power would remain at Rs 7.5 a unit by 2020 if indigenous solar cells are used. The current cost of solar power in the country is the Rs 6.5-8 a unit.

Earlier, MNRE had raised concerns that the cost of solar power would double if high anti-dumping duty on imports of solar cells was imposed. Piyush Goyal, minister for coal, power and renewable energy, also on several occasions had issued statements against the imposition of dumping duty on imported solar cells. He also urged the finance ministry to review the decision on dumping as it would “escalate the cost of solar power”.

He also said that India needs to promote its own manufacturing capabilities as domestic equipment capacity is inadequate to meet the demands of the country’s ambitious solar power mission.

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