The imposition of an anti-dumping duty could be detrimental to India’s growing solar sector. The government needs to find a path forward that creates a solution where everyone benefits – including suppliers, indigenous manufacturers, and project developers.

The following is from a conversation Mercom India had with Manish Narula, senior director of business development (India), for Jinko Solar.

What are your thoughts on the Indian solar sector?

It is growing better than expected. In the past two years, over 10 GW of solar have been installed; that speaks volumes about the sector and its growth trajectory.

What has changed?

Earlier, there was confusion and doubt in the minds of investors. Now that has gone. There are two types of people who invest in solar projects – the independent power producers (IPPs) who develop the projects, and the banks and lending institutions that fund them.

Both are taking risks when they invest. But now, the rapid growth has helped dissipate their doubts about investing in solar in India. The ease of doing business has increased.

What is making investors think positively about the sector?

Tariffs have been reduced, quality equipment is available, and technology maturation has resulted in increased efficiency and asset reliability. Add in the ease of doing business, and investor inhibitions have been shot down one-by-one.

The tariff decline in the Indian solar sector coincided with falling module prices, what are your thoughts on the relationship between these two?

The drop in solar tariffs coincided with the decline in module prices to a point, but falling module prices weren’t singlehandedly responsible for declining tariffs.

If you look at the current trend, you can see that module prices are spiking slowly but solar tariffs have remained around the same mark – below ₹3/kWh. Take for instance the GUVNL tender of 500 MW, ₹2.65/kWh was the lowest recorded tariff, despite the increase in module prices in recent months.

Growing investor confidence in the Indian market has also helped to lower solar tariffs.

Are the current tariffs feasible, and if so, would you elaborate on how this is possible when module prices are increasing?

The current solar tariffs are feasible regardless of whether module prices increase or remain at current rates.

Project costs are comprised of the cost of equipment, generation, operation and maintenance (O&M) services, and landing rates. An IPP or EPC company that is able to reduce these other costs can still develop projects at these tariffs even if module prices do not fall.

What do you have to say about the Indian solar market in comparison to other markets across the globe where you are active?

The Indian market is on a different level compared to others. The Indian market has a clear program to install 100 GW by 2022. A clear mandate has been provided by the government and the commitment is increasing every day.

India utilizes a competitive bidding process for tariff discovery, and every time it beats its own low tariff. In mature markets like Europe, the U.S., and China, there is a fixed tariff and competition is based on quality and the completion timeline – not on the terms of the tariff.

Do you think it is becoming tougher to procure modules at current project costs?

In the beginning, ₹17/kWh was acceptable. Now ₹2.44/kWh is acceptable. We are still supplying and there’s been no slowdown in demand. My clients are still buying and this year we have a supply target of 10 GW globally. The Indian market is a crucial part of that total.

Can you tell me more about the current module price trend?

We cannot put a particular price on modules, like a spot price. Module costs vary based on time zones and product selection. These price fluctuations are based on how module manufacturers procure their raw materials and foreign currency fluctuations.

We cannot demand our customers pay a particular price because the price is based on our supply of cells and wafers, and the price of these depends on the cost of raw materials. We adjust the module prices in accordance with the cost of raw materials.