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Solar Energy in India – Domestic Content Requirements may be made more Stringent for Longer Time

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Solar Energy in India is one of the biggest growth opportunities of the 21st century,however the recent government auction of solar projects has thrown a spanner in the works.Numerous problems have cropped up with JNNSM including presence of unknown companies as the best bidders with irrational bidding,debt financing problems and lack of scale.However the government seems to be confident of achieving the 1.1 GW 2013 target under the Phase 1 of the Solar Mission.

Note both the Solar Thermal and Solar PV Project bidding have led to grave doubts about how these solar plants will be implemented.Not only are the firms small,unknown with little project experience but they have also bid for feed in tariffs which would definitely lead to losses.According to MNRE,the government also plans to make the local domestic content requirements more stringent.The requirements will be extended to solar inverters as well and the provisions may not stop at 2013 but will go beyond as well.Note the JNNSM mandates that modules for solar energy be made in India in the first year and both cells and panels be made in the 2nd year.This is important for the growth of solar energy equipment manufacturing in India.This has been successfully used by both China and Canada to foster the growth of the green industry in their domestic market.However it has the side effect of raising prices and increasing inefficiency as they would lead to higher costs.They could also lead to the gaming of the system particularly as India is highly corruption prone country.

Solar Inverters are a crucial part of the Solar System which converts the DC electricity generated by the solar panels to AC electricity which is used in the Electricity Grid and Home/Office Appliances.Note Solar Inverters are seeing a great amount of innovation with the introduction of microinverters etc.A worldwide shortage of solar inverters in 2010 had caused solar installation to slightly slow down.SMA Solar is the biggest solar inverter producer in the world

India May Extend Local-Supply Rules for Solar Power Beyond 2013

India may expand its rules that require solar-power projects to use domestic suppliers for a portion of their equipment, a government official said.A regulation that Indian-made equipment be used in solar plants may be extended beyond 2013 to include inverters, Deepak Gupta, secretary of the Ministry of New and Renewable Energy, said at a conference in Mumbai.

β€œIt’s a good idea for inverters to be made in India,” Gupta said. “The time has come.” Inverters help convert the current from a solar panel into a voltage that is usable by common electrical appliances.

PG

Abhishek Shah

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