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Dumping duty on imported cells to double Solar Power costs

Solar power costs could now double, after falling steeply in the past few years, if the government goes ahead and imposes dumping duty on imported solar cells, according to industry executives. Officials at the ministry of new & renewable energy (MNRE) are apprehensive about the large number of projects getting stuck due to price escalation. More than 70 Percent of projects across the country use imported solar cells and around 4,000 MW was tendered recently. This includes 375 MW tendered out in the imported content category of phase II of the National Solar Mission, in January this year.

"Duties imposed by the commerce department would escalate cost of panels by 100 Percent. Solar panel costs constitute half the project cost. We are looking at a massive increase," said a senior official at MNRE, pegging cost of solar power at INR 12.5 per unit, from the current INR 6.5-8.

Sector experts said dumping duty would also have a cascading effect on central and state solar programmes. "All imports of panels will be halted. Import prices will shoot up to $1.41/watt whereas market price of domestic cells is set at $0.48/watt, rendering all imports impractical," said Sunil Jain, CEO, Hero Future Energies.

States such as Tamil Nadu have written to the government that they will scrap solar programmes if the cost escalates. Karnataka, which was supposed to seek bids for 130 MW solar power last month, withheld bidding on confusion over price of imported solar cells and domestic supply.

"Distribution companies are already wary of purchasing expensive solar power. With the price doubling now, no discom would be interested. The whole purpose of aligning solar power with the main grid stands defeated," said a senior MNRE official.

Source-On Request