The National Solar Energy Federation of India (NSEFI) has written to the Ministry of New and Renewable Energy (MNRE) expressing its concerns over the levy of anti-dumping duty on aluminum and zinc-coated flat products originating from China, South Korea, and Vietnam.

In solar projects, the panels are mounted on module mounting structures which are made up of aluminum and zinc-coated flat products.

In the letter, the solar federation has underlined that an anti-dumping investigation on these products could lead to the levy of duty on them which would consequently lead to higher costs for solar photovoltaic (PV) project developers.

The Directorate General of Trade Remedies (DGTR) is soon going to issue its preliminary findings in the matter. According to NSEFI, approximately 49 GW of solar projects are under various stages of development, and in the next 18 months, they would require up to ~1,500,000 tons of aluminum and zinc-coated flat products.

NSEFI has argued that if a duty is levied, solar PV project developers will raise the claims of tariff adjustment citing the ‘Change in Law’ clause. The entire process of negotiation is then likely to take a long time and adversely affect the project pipelines and the construction timelines across the country. It will also lead to passing down of cost to consumers in terms of higher tariffs.

In its letter, NSEFI has stated that the Indian manufacturers of aluminum and zinc-coated flat products do not have the required capacity to meet the demand and the levy of such a duty will delay project commissioning. So far, anti-dumping duty has already been levied on solar glass and EVA backsheets. The domestic capacity for manufacturing solar glass is merely 800 MW according to the NSEFI letter, and it could not meet the rising demand of Indian module and cell manufacturers. Similarly, in the solar EVA backsheet case, the indigenous manufacturers were not able to meet demand.

There was no slowdown in imports of solar glass and EVA backsheets; instead, the prices for these components went up.  The capacity expansion has not happened so far in terms of setting up new manufacturing units by the domestic industry.

With these arguments, the NSEFI has requested that aluminum and zinc-coated flat products be excluded from the investigation, adding that the DGTR should be asked not to levy preliminary anti-dumping duty until the investigation concludes in its entirety.

Currently safeguard duty has been imposed on solar cells and modules along with anti-dumping duties on EVA backsheets, and solar glass imports.

With government agencies imposing aggressive tariff caps, there is little room for maneuvering in terms of component costs. Solar mounting structures are one area where developers have looked to reduce costs to be able to compete in the extremely competitive auctions, according to Mercom India Research analysts. Any increase in mounting structure prices will directly increase the project costs.

Image credit: Pennar