Anti-Dumping Duties Will Not Affect Auctioned Solar Projects in India

Several key players in India’s solar industry met recently to discuss the impact of the investigation into imported solar goods and possible effects of anti-dumping duty recommendation. This is the most pressing topic in the industry right now with severe implications to the entire supply chain depending on the final anti-dumping case decision.

The meeting was attended by Indian Solar Association President C. Narasimhan, Minister of Commerce and Industry Suresh Prabhu, Minister of State for Power (IC) and MNRE R.K. Singh, and secretaries of the Ministry of New and Renewable Energy (MNRE).

During the proceedings, the Indian Solar Association submitted a letter suggesting that the anti-dumping investigation be stopped, and the proposed anti-dumping duty be done away with for the greater good of the Indian solar sector.

Mercom conducted an exclusive interview with Mr. Narasimhan to learn about what happened. Here are excerpts from that interview.

What was the basis of the discussion held during your meeting with the ministers and secretaries?

My delegation and I met with the ministers to give them a letter stating that the anti-dumping investigation should be withdrawn, and an anti-dumping duty should not be levied on solar imports.

The Indian Solar Association believes that Indian module manufacturers should be on a level playing field with foreign suppliers in terms of technology, the efficiency of deliverables, and meeting demands, before they can be brought on par with those suppliers in terms of pricing.

This would be beneficial for solar module manufacturers in India as well as project developers, who will have a plethora of quality products to choose from.

You are saying that the anti-dumping investigation is not in the long-term interest of the solar sector. What should the government do instead?

The government should consider giving price incentives, subsidized credit, and other such financial incentives to module manufacturers in India. This will make them competitive. If an anti-dumping duty is imposed it would make many investors and banks jittery about project viability, and that will not be good if we must reach 100 GW by 2022 and beyond.

What is your reason for taking a stand and opposing the imposition of an anti-dumping duty?

The additional cost of the anti-dumping duty would have an adverse impact on project developers who entered into power purchase agreements (PPAs) prior to the imposition of the duty and are yet to procure modules. Our concern arises out of the uncertainty of the mechanism under the change in law provision in current PPAs.

What did the government executives and officials say?

The anti-dumping investigation will not stop. But, the ministers also promised that the government will extend their support and see that no project developer is unduly affected.

The government will ensure that all projects that have been auctioned recently and for which PPAs have been or will be signed before the imposition of the anti-dumping duty will be exempted from the effects of the anti-dumping duty. These project developers will not have to bear the extra cost burden if an anti-dumping is imposed.

Apart from the anti-dumping matter, what else is the government/MNRE planning for the local manufacturing sector?

The officials let us know that there will be soon a mega manufacturing tender of 20 GW. The contractual agreement for these manufacturing units will be drafted in such a way that in the first year the manufacturer will develop module manufacturing capacity; in the second year, cell manufacturing; in the third year, wafer, or ingot manufacturing; and finally polysilicon manufacturing in the fourth year.

The government should also mandate that the entire PSU and government building rooftop solar capacity be installed under the domestic content category. This would be in accordance with all WTO norms and no country would have an issue as none of the power generated would be fed to grid. This along with incentives is the right way forward.

What are your thoughts on the 20 GW manufacturing tender plan?

This initiative can fetch good results, provided that support is provided by the government. In China, wherever I travelled, I got to know that every other GW-scale manufacturing plant is getting an incentive from government. If such a support was made available here, we could develop one of the best manufacturing hubs, globally.

In general, how do you think the Indian solar sector can be improved?

All solar projects in India should be covered under exclusive solar insurance. This means a generation guarantee.

The generation guarantee would depend on solar irradiation. If there are 300 sunny days and the estimated projection of power generated is being made on that, then the developer will face a loss if the number of sunny days gets reduced due to weather changes or something else.

If there was insurance, then developers wouldn’t lose out for the days when they cannot generate due to causes out of their control. We have invited reinsurance companies to India to work out a policy under the National Solar Generation Guarantee Coverage. This will be established in six months.

What was the reaction from the Indian Solar Manufacturers Association (ISMA)?

After our meeting with the minister for power and commerce, I received calls from the ISMA office bearers. We are going to have a meeting with ISMA to chart out a middle ground wherein the concerns of both manufacturers and project developers can be addressed.

Do you have any comments regarding the electric vehicle (EV) and energy storage system sectors in India?

The EV and ESS (energy storage system) sector in India is in the nascent stage. Yes, we have seen an upsurge in activity, but name me one producer of Li-ion batteries in India.

For both EV and ESS, Li-ion batteries are a pre-requisite, but there is no producer in the country. If there are no batteries, how can we be self-sufficient in these sectors?

The government should create incentives for manufacturers of battery cells in India.

Along with being the president of the Indian Solar Association, you are also involved in the renewable energy sector through the Raasi Group of Companies. What are Raasi Group’s expansion plans?

I have a firm belief in the Indian solar sector. By the first half of 2018, Raasi Group will have constructed a 100 MW module manufacturing plant in Krishnagiri. In 2019, we have plans to develop a 500 MW manufacturing unit in Ramnad.

To enter the EV sector, Raasi Group is planning the construction of a battery assembly unit in India. We are in talks with TVS and Ashok Leyland.

Raasi Green Earth Energy Pvt Ltd is a successful bidder of a 100 MW solar power project under Tamil Nadu Government’s latest 1,500 MW solar power tender with TANGEDCO at ₹3.47/unit and acquired the PPA with all necessary implementation of the project is under process.