Anti dumping duty on solar modules: A handful of manufacturers will only benefitted
The recently proposed anti dumping duty by Ministry of Commerce is going to provide benefit to a handful of solar module manufacturers and will kill the growing market of solar PV in the country which is expected to add every year about 2 GW of solar capacity and bring about 14,000 crore investment on annual basis to boost Indian economy. Innfact about fifty percent of this investment is expected from the international investors which will dry out in case anti dumping duty is slapped.
Ministry of commerce has proposed Anti-dumping duties in the range of between $0.11-0.81 per Wp on the PV modules imported from China, US, Malaysia and Taiwan which contribute about 80% of the total module supply in the country. While the present module prices are of the order of $ 0.60/Wp, imposition of anti dumping duty as high as $0.81/Wp has no justification to save some three four manufacturers who are lobbying with the government for their own interests. Infact this will lead to a reduced demand in the market and will be detrimental to these companies as well in long term.
Imposition of duties on the PV modules is expected to crash the investments planned in the recently comleted solar bid of 750 MW by SECI. Apart from this there are various states where the projects are in the implementation phase and will stall the implementation process of about 1GW capacity for which the work is yet to start. The imposition of anti dumping duty is expected to take the solar project cost to about Rs. 10 Cr/MW and the tariffs will touch to about Rs. 10/kWh. Already we can se the implications of this type of policy uncertainty in the recently concluded Chattisgarh bid. The prices quoted by the investors were as high as Rs.. 10/kWh.
There are various captive project developers to which solar has already reached to grid parity and the news of anti dumping has forced them to reconsider their decision to move forward for implementation. Project developers will be forced to reconsider their plans and cautiously reviewing the fate of the anti dumping decision. EPC contractors are also passing through a difficult phase as most of the project developers have deferred their plans to kick start their project activity.
It is important for the Modi government to remove the policy uncertainty and provide clear guidelines through which investors can plan their long term investments in solar projects. While many PPAs have already been signed, there is no point in imposition anti dumping duty which can kill the growing solar market in India.