Indian Imports of Chinese Solar Cells to Continue despite Indian Panel Factory Closures

The Indian government is not going to impose any new duties on imports of Chinese solar cells. This is despite the petition by the Indian solar panel manufacturers to give a level playing field. Note Chinese solar panels have virtually destroyed the solar manufacturing industry in the West with big companies falling under the relentless price pressure where solar panel prices have gone down by 60% in one year. Only the Koreans seem to be standing up to the Chinese government backed top tier solar companies from China. The rest have mostly folded up and are facing survival questions including those from Taiwan. Indian solar companies were never that big and cost competitive anyway given the headstart and support of the Chinese backed companies. The price crash in 2011 has seen most of them close their factories as they can’t even cover their costs at the Gross Margin Level.

Indian Solar Panel Companies are asking for protection from cheap imports from China and other countries. Note the prices of solar panels have fallen by 60% in 2011 due to a number of reasons such as cheap raw material polysilicon prices,high competition between majormodule manufacturers, dropping processing costs. The biggest reason for the solar panel price crash has been the support of the Chinese and other Asian government to their respective domestic solar industries.

It is a fact that many of the major solar module companies would be bankrupt right now without government support. LDK is the prime example of a zombie company flourishing on the back of Chinese government support. Indian solar panel makers have got some protection with the federal subsidy policy JNNSM mandating that cell and modules be made in India.However thin film solar panel technlogy is exempt which means that they are not fully protected.Besides state government solar polices don’t protect them at all. The consequence has been that most of the solar panel companies are running at 0 to 20% utilization as orders dry up.

The Indian Solar Companies were hoping that like the US government , India too would impose some sort of  anti-dumping duty on imports of Chinese solar cells and panels. But the government seems in no mood to oblige. Note the import duties would hurt the powerful Indian utilities and developers who need the cheap solar panels. There is some protection for the solar players in the federal subsidy scheme JNNSM but nothing for the state subsidy programs. It looks likey that most of  the Indian solar cell and panel producers will be wiped out given the current state of affairs.

Read our previous stories on Domestic Content Controversies on Indian Solar Panels.

USA Opposes India’s Solar Energy Domestic Content Requirements

USA has opposed India’s Local Content Requirements for the Federal Solar Energy JNNSM program.Note according to the JNNSM rules,solar panels will have to be produced in India for the first year and solar cells will also have to produced from the second year.There is also a proposal that the local content requirements may be extended beyond 2013 and will also include solar inverters.US administration is opposed to these rules as it will lead to export hurdles for its solar companies Sunpower and First Solar.India installers and developers have also opposed the move as it will lead to lesser choice amongst suppliers and probably higher costs.

Why Germany could join USA, India in Anti Dumping Duty on Chinese Solar Panels Imports

Solar Trade Wars are becoming the norm in the globe these days with the major one between USA and China.The instigator is the German solar company Solarworld which helped started the ITC Case in the USA. India too is thinking of putting some kind of import duty to protect its domestic solar panel producers which are dropping like flies. Chinese solar panel producers have swamped the world with super cheap solar modules. though a part of their low prices can be explained by competitive advantage, another part is due to  the labor, capital subsidy given by the Chinese government. It would not take  a rocket scientist to say that some of the biggest Chinese solar companies are insolvent and would be dead within a month without Chinese state loans.

The government says it has no objections to Imports of low-priced Chinese solar cells as long as they meet prescribed quality standards. This comes as a setback to domestic manufacturers battling cheaper Chinese imports. Last week, the government rejected a plea of domestic players seeking imposition of import duty on finished solar equipment.

“The market will always bend towards the products which are low-priced. But, yes the quality matters,” said Tarun Kapoor, joint secretary, ministry of new and renewable energy. Kapoor, however, said, “We support what is legal, this is a case and we support WTO-accepted norms. It is not country specific, it’s rule specific.”

India’s National Solar Mission gives preference to domestic manufacturers. However, this is only at the central level and states are not obliged to follow this policy. “There’s only one scheme that offers this provision and it’s not a law,” Kapoor said. “We give the projects to developers who in turn are free to choose the products. If the prices are low and quality is good, then obviously, anyone would go for it.”