Domestic solar manufacturers are in a quandary with less than 30 per cent of the installed capacity of 9 GW module-making capability in the country being used and imports continuing to hurt them.
While India is seen as one of the most promising markets for solar power sector growth, domestic manufacturers are seeking a level playing field as huge imports are jeopardising local manufacturing, according to India Solar Manufacturers’ Association.
If the ambitious targets of the Government are to be met, India would actually require about 16-17 GW of manufacturing capacity to keep pace with the growing requirement.
Pradeep Kheruka, Managing Director of Gujarat Borosil and Governing Council Member at ISMA, believes the country's solar manufacturers have the capability to deliver projects at grid parity once the duty structure anomalies are addressed.
“We are, in fact, looking at a situation post the duty imposition, once it happens, solar power would be priced at around ₹3 per unit and this compares well with power generation from coal fired thermal power plants. But interestingly, now hardly any Discom supplies power at ₹3 a unit. This provides adequate cushion,” he told BusinessLine. Explaining the genesis of the problem and the recent plea made by the association to the Directorate General of Safeguards, on dumping of modules from China, he said, “Already, the concerned authorities have concurred that there has been large scale import of cells and modules, which has resulted in severe injury to domestic manufacturers. We expect a corrective measure soon once a panel of five Secretaries gets to decide on the issue.”
“Domestic manufacturers are now in an intensive care unit with their finances stretched and poor capacity utilisation,” he said.
Explaining the rationale on how they expect to achieve grid parity, he said, “Once duty is imposed, a temporary marginal increase of tariff is expected. However, this will be mitigated with rapid expansion of manufacturing capacity in the country. Which will also result in huge job creation.” A recent report by Crisil had, however, suggested that 70 per cent safeguard duty on imported solar panels and modules proposed could crank up project costs and impact about 3 GW of projects under implementation.