India’s solar industry is nothing short of a roller coaster ride. We keep hearing news about several ups and downs in the industry. Though the country is making commendable progress on the solar path, it is still facing several hiccups in the form of unclear policies and lack of proper infrastructure.

As expected, India reported a decline in its import-export numbers for the last year. The country imposed a 25% safeguard duty on imports from neighboring countries like China which led to the slowdown. Lack of demand was another reason for the reduced activity. The imports of solar cells and modules went down by 37%, while export also slumped 19%. This is in stark contrast with 2017 when imports had increased by more than 40%, as compared to 2016.

Data Source: Economic Times

Most of the solar panels and cells used in India are imported from China and Malaysia. The safeguard duty when imposed last year wasn’t very clear. Developers were unsure about the rates which led to bidders refraining from any activity. Then there was a limit on solar power tariff at INR 2.5 and INR 2.68 per unit for developers using indigenous and imported solar cells and panels. This was no good news for developers who would feel the strain on their margins. All these steps put developers off and led to a slowdown.

The year 2018 saw a decline in new capacity additions and the trend could continue in future due to increasing volatility in tender issuance and auctions. India has one of the most aggressive solar targets to be achieved over the next four years and needs to formulate policies and regulations keeping that in mind.