Expiry of the responsibility to guard: blessing for solar builders, curse for producers – enterprise normal

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Indian solar cell and module manufacturers could face difficult times until April next year without protection from imports.

The Safeguard Duty (SGD), which was levied on solar cell and module imports over the past two years, expired last month and the Basic Customs Duty (BCD) announced by the center will only come into force after 9 months.

This would exacerbate the problems of domestic solar cell and module manufacturers, according to industry leaders. But it's a boon for solar project developers as they can import before the BCD is enforced.

“The 9-month duty-free period with a ‘free for all' gives Indian solar developers a well-deserved respite. We can expect a huge increase in imports of solar modules and equipment, ”said Animesh Damani, managing partner of Artha Energy Sources. He said the industry could see solar tariffs cut nearly 15 percent as more projects and new players enter the business.

In recent tenders, project developers have started offering competitive tariffs to take advantage of the duty-free period by importing inexpensive material.

There is a price difference of around 10-20 percent between Indian and Chinese solar cells and modules. India imports almost 90 percent of its solar cells and modules, and almost 80 percent of them from China. According to industry data, India has 3,100 MW of cell manufacturing capacity and 9,000 MW of module manufacturing capacity. India's installed solar power capacity is 39.08 GW (including open spaces and roofs).

The country wants to have 100 gigawatts of solar power capacity by next year.

In the past three years, India has seen several changes in customs regulations for imported solar cells and modules. For a sector dependent on imports, this was a major deterrent when tendering projects or calculating a valid tariff.

In addition to the BCD, the center has also launched an investigation into complaints about dumping solar imports from China, Vietnam and Taiwan. The complaints were made by Mundra Solar PV, the solar production unit of Adani Enterprises, and Jupiter Solar Power to the General Directorate of Trade Defense Equipment (DGTR) of the Ministry of Commerce.

This is the third such attempt by the Indian solar industry in the last decade to relieve itself of imports, especially from China.

The senior executive of a leading manufacturing company said anti-dumping will help level the playing field for domestic module manufacturers. “This will provide much-needed alleviation of the material damage inflicted on the domestic sector under pressure from cheap imports from these countries and also help protect over 300,000 jobs,” said a senior official.

During the SGD period, India saw imports increase by over 85 percent. Executives said imports would soar as much as 95 percent during this duty-free period.

“The domestic manufacturers are currently lacking orders and they are running under optimal capacity. And the customers (project developers) eagerly waited for the SGD to expire in order to place orders from foreign players at a lower price. This will make it extremely difficult to supply local manufacturers as they will have almost no orders to continue production, ”said the manager quoted above.

A provisional anti-dumping duty should be imposed pending the conclusion of the anti-dumping investigation.

The All India Solar Industries Association (AISIA) said in a recent statement that since tariffs on raw materials would remain intact, it would create huge cost differentials for domestically produced solar panels.

“Domestic manufacturers will continue to have to pay high tariffs on imported raw materials and will therefore not be able to compete with internationally produced modules. We are already experiencing delays in project installations and order cancellations as most of them waited for SGD to hire to place orders for international modules. As of August, 100 percent of solar panel equipment will be imported without any tariff restrictions or guidelines to help Indian manufacturers keep business operations going, ”the statement said.


Before the basic tariff goes into effect, developers take advantage of the duty-free period, resulting in competitive tariffs as most will import before April 2022

Latest solar tariff in Gujarat: Rs 2.20 per unit

Last lowest tariff: Rs 1.99 per unit

Average solar tariff currently across the country: Rs 2.5 per unit

Current price of the imported solar module: 22-25 cents per Kwh

Tariff escalation due to BCD: 40 Paisa per unit

Tariff escalation when panel prices skyrocket: 50-60 Paisa per unit


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