Safeguard duty in India will hurt domestic solar growth -BoI

Welspung solar park in Madhya Pradesh. Source: Welspun Renewables.

January 12 (Renewables Now) - The safeguard duty of 70% proposed for solar cell imports into India would lead to a significant slowdown in the country’s solar sector and much higher bids in upcoming tenders, Bridge to India (BoI) warns.

Even if a more modest duty of around 30% is imposed, the effect will still be significant, resulting in declining activity and the “loss of many more jobs” than potentially would be created in manufacturing, according to the consultancy.

The duty, the recommendation for which came a month after solar manufacturers requested it, is for imports from all countries except developing countries other than China and Malaysia. According to Bridge to India, this is roughly 90% of cells and modules used in India. It estimates that in the case of a 30% to 70% final duty, tariffs in solar tenders will climb by 17%-35% or INR 0.45 to INR 0.90 per kWh to allow developers to maintain financial returns.

Two tenders for a total of 950 MW of photovoltaic (PV) capacity in Karnataka and Andhra Pradesh were launched last week by the Solar Energy Corporation of India (SECI, both with a cap of INR 2.93/kWh.

In a document dated January 5, the Directorate General of Safeguards, Customs and Central Excise, called for the immediate imposition of a provisional safeguard duty for a recommended period of 200 days.

(INR 100 = USD 1.57/EUR 1.3)

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Tsvet has been following the development of the global renewable energy industry for seven years now. She's got a soft spot for emerging markets.

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