26 August 2014 | BRIDGE TO INDIA
In a major relief to the solar sector, the Ministry of Finance (MoF) has not acted upon the recommendations made by the Ministry of Commerce (MoC) for imposing anti-dumping duties on import of solar cells and modules. No official communiqué has been issued by the MoF yet but the deadline of 22nd August 2014 for acting upon the recommendations has gone by.
- Government to focus on growing the market and thus promote domestic manufacturing
- Indian government can focus on its ambitious plan for the industry
- NTPC is on board and planning to build over 3000 MW of solar capacity in the coming years
The Ministry of New and Renewable Energy (MNRE) under the current minister, Piyush Goyal, is known to have played a key role in ensuring that the duties were not enforced. In an interactive session held on Friday (22ndAugust 2014) between the new minister, ministry officials and stakeholders from the developer and manufacturing community, a very clear message that came out was, current capacity of domestic manufacturing is not large enough to cater to the ambitious plans of the new government and that the government is not willing to wait for domestic manufacturing to grow before increasing the size of the market. Instead, the government is going to focus on growing the market and using that to promote domestic manufacturing. BRIDGE TO INDIA believes that such a pragmatic approach is best for the market.
Now that the anti-dumping hurdle is out of the way, the Indian government can focus on its own ambitious plans. During Mr. Goyal’s speech on 22nd August 2014, it became apparent that, he considers the current policy framework and industry strength does not match up to the solar installation targets that the government is keen to achieve. The minister conveyed that the new government wants to see 5-7 GW of additional solar PV installations per year.
In a bid to bypass the perceived shortcomings in the current market, MNRE is mooting the concept of Renewable Generation Obligations (RGO) to bring the large traditional power generators into the solar market. The National Thermal Power Corporation (NTPC), that shared the dais with the ministry officials in the meeting, has already been brought on board and is planning to build over 3000 MW of solar capacity in the next years.
On behest of the MNRE, NTPC has agreed to use domestic modules for their projects. Due to the limited cell and module capacity available in the country, NTPC will start off with a 250 MW project. A tender for procurement for this project can be expected as early as next month.
If India makes a move towards an RGO model to drive solar demand, it might prove to be bad news for independent power producers (IPPs) in the utility scale solar market. This opinion was re-iterated by the developers present at Friday’s meeting who called for a more ‘democratic and organic’ growth in the market by limiting the capacities constructed by a single player. BRIDGE TO INDIA believes that the solution to this problem also lies in growing the solar pie, which the government appears to be aware of.
The rooftop and off-grid market were not discussed in detail in the meeting and we still do not know the government’s perspective on them. The minister has, however, promised to ensure that the funds from the National Clean Energy Fund (NCEF) would be directed to MNRE. Until now, the funds have almost completely been transferred to offset India’s fiscal deficit. We still await details on how the Indian government wants bring solar into the off grid market to power the millions of unserved households.