The Ongoing Debate Around Safeguard Duty Imposition on Imported Solar Panels

The India Solar Industry is in a state of dilemma, with the government exempting imported solar panels from customs duty on the one hand, while thinking about imposing safeguard duties on the other.

The Indian Solar Manufacturers Association (ISMA) has proposed imposition of 70% safeguard duties on imports of solar cells and modules to the Commerce ministry. ISMA which consists of leading domestic solar companies like Adani Group, Vikram Solar, and Tata Power, are proposing these duties in order to protect the Indian solar manufacturers and thus giving a boost to the government’s “Make in India” policy.

The progress of solar development could be hampered if such duties are imposed as India is a price sensitive market (as imported solar cells and modules will get expensive if these duties are imposed). As a result, developers would be reluctant in buying imported solar products and end up buying the domestically manufactured solar cells and modules.

solar panels india

But there are few questions which the government needs to consider before making a final decision:

  • The solar tariff in India is the lowest worldwide, if the cost component increases (with the duty imposition), the solar business might become less lucrative for the developers.
  • Are domestically manufactured solar products competitive enough?
  • Will these duties benefit only a handful few at the cost of masses?
  • Has India achieved the technical competence and efficiency results as their large Chinese counterparts like Jinko and Trina Solar?

India has just achieved one-fifth of its full solar installation target last year. That means the country will have to ramp up its solar activities in the coming four-five years. The solar developers think the country still needs a few more years to become completely import free. The Tier 1 Chinese solar products are not only price competitive but also of superior quality. The Indian solar manufacturers, except for a handful few, have failed to exude the technical competence and manufacturing muscle as their western counterparts.

However, with all that said, I also believe that having a safeguard duty in place will definitely give an incentive for encouraging domestic solar manufacturing. Though it would pinch the Indian solar developers initially, it would encourage production in the long run. The cost of setting up a solar plant is now cheaper than installing a thermal power plant in most parts of the world. Having a safeguard duty in India will encourage domestic players to set up solar manufacturing plants in India. Many countries including China have protectionist policies in place to save their domestic manufacturing.

Another benefit from duty imposition would be safeguarding India from flooding with relatively poor quality imported solar cells and panels. Imposition of safeguard duty should not be considered on a standalone basis, instead, the government should also impose proper BIS requirements for quality checks and controls on domestically manufactured solar products along with getting technically superior quality products manufactured.

India is laying the foundation of a solar nation and all we want is the foundation to be strong!

NTPC Invites Bids for 2GW Wind & Solar

The growth of distributed renewable energy has been quite aggressive over the recent years, as solar and wind energy get cheaper than even coal power in most parts of the world. Not only is renewable energy cheaper, but also environment-friendly. With rising global warming, nations have pledged to increase their renewable energy commitments and are shifting attention to greener options. The success of solar projects itself can be gauged from the fact that globally, more than 90 GW of solar power capacity was added in the last year itself. The Indian government has been touting solar power as a major source of power generation which resulted in India taking the second position, after China, in terms of new solar energy addition in 2017, leaving behind developed nations like US, Japan and Europe.

The costs of electricity from solar and wind energy are further expected to decline by 25%-60% between 2015 and 2025. Solar and wind prices are already very cheap, with India registering tariffs of INR 2.43/kWh and INR 2.44/kWh for wind and solar power projects respectively. About two-thirds of new investment in power plants by 2040 will come from renewable sources of energy, according to IEA.

The utility companies are, therefore,  in a state of distress worldwide. These companies who own a large number of coal and gas power plants in their portfolios are planning to shift their focus towards renewable energy assets to stay relevant in future. Moreover, there is huge government pressure to fight against climate change globally which is forcing countries to go green. Also, read Leading US Companies Go Green and Pave the Way for Others to Follow.

Solar Vs Fossil Fuel generation

Solar Vs Fossil Fuel generation

The renewable energy plants combined with storage options are further poised to disrupt the existing energy value chain. Utility companies are sitting up and taking notice of all these fundamental changes in the energy industry and are taking steps to incorporate green energy generation assets in their respective asset bases. More and more utility companies worldwide are steadily raising their stakes in renewable energy investments. Recently, National Thermal Power Corp (NTPC) which is India’s biggest power utility, has invited bids for 2 GW of solar and wind energy capacity, which will replace coal power supply. The move is expected to result in savings for the company as thermal power generation is costly. NTPC will share half of these savings with distribution utilities. The tender is expected to gain momentum, given NTPC’s reputation in power industry and a sound financial footing.

NTPC’s assets are majorly comprised of coal power plants. But the power company is playing an instrumental role in helping India get closer to achieving its 175 GW of renewable energy target. It has been steadily increasing solar energy and reducing thermal power generation in its overall energy generation mix. However, the pace of change is slow.

Solar Energy in Bangladesh

Given the success stories of renewable energy worldwide, Bangladesh is also planning to go big on solar! The country has taken few big steps in this regard over the last few years. Here are few highlights of solar energy in Bangladesh:

i) Setting up of SHS – Solar Home System program

ii) Setting up of BEZA – Bangladesh Economic Zones Authority

iii) Signing PPAs for solar power generation

iv) Expressing interest in buying solar power from neighboring countries like India.

Bangladesh aims at making renewable energy account for about 10% of the total power generation capacity by 2021 – somewhere around 2400MW power. Given the present state of affairs, it looks like most of it would come from solar energy.

First Solar Solar Panels

The country runs a Solar Home System (SHS) program, which has granted electricity from rooftop solar to a large number of people living in off-grid locations, where access to power was impossible. However, this is equal to just 250 MW of solar installations, which means the country still has a long way to go to achieve its renewable energy goal. At present, the on-grid solar power generation capacity in Bangladesh stands at 15MW.  SkyPower had announced building 2 GW of utility-scale solar energy in Bangladesh in 2015, with no further updates till date. Last year, BEZA or Bangladesh Economic Zones Authority signed an agreement with POWERCHINA to set up a 1 GW solar power park in the country. BEZA has plans of setting up a 100o MW solar power zone. The country is heavily dependent upon thermal power for its electricity needs.

Bangladesh had signed PPAs for solar power generation amounting to 1070MW. However, the companies were not able to honor their commitments. Lack of land and proper government incentives have curtailed solar development in Bangladesh. The country can also look at developing floating solar power projects, which are proving to be a huge success in land-locked countries worldwide. In order to promote solar power in the country, the World Bank approved $55 million funds for rural areas of Bangladesh not connected with the grid. A Norwegian company Scatec Solar has also announced setting up an 800 MW solar power project in Bangladesh. Recently, Bangladesh has expressed an interest in buying 2000 MW of solar power from India.

India is planning to provide electricity from large solar parks being set up in Gujarat and Rajasthan. India is keen on strengthening its energy linkages with Bangladesh given its strategic location and is also interested in constructing a solar power plant where the entire power generated could be supplied to Bangladesh. Though the move is being regarded as a good step in boosting cross-border energy trade, the country should look at constructing plants in the eastern states to reduce power losses during transmission. Prime Minister Modi has huge plans to support neighborhood trade with his “South Asia-focused neighborhood-first policy” and this deal will be a big step in this direction. PM Modi is focusing on energy security as an important agenda of India-Bangladesh ties and is looking at adding 500MW transmission under an existing link.

Solar plus Storage Market In Australia

The extremely high costs of retail electricity in Australia has made it a hot market for solar energy plus storage systems. Sonnen and Tesla were the two players who were providing solar plus storage systems on a small scale to Australia before Tesla landed a big order for a large grid-scale battery of 100 MW size in South Australia. Tesla was able to build this system in a record time and the operations have been highly successful and helping meet the demand of the ancillary and wholesale markets.

This success has led the South Australian government to decide to fit 50,000 homes with solar plus storage systems. During the initial phase, government supported housing will be fitted with these systems before expanding the scale to other government institutions and infrastructure. These systems will not be developed using the pure play house owner owned systems but rather will be owned by the developer who will use these systems not only to supply power to the house but also to the wholesale and ancillary markets.

solar_storage

Also, read 7 Cents Solar Plus Storage Price By 2022 Could Bankrupt Most Indian Power Utilities

These systems will serve as a large virtual power plant (VPP) which can act as a dispatchable power source during times of high demand and earning revenues from supplying power to the balancing markets. This kind of VPP has already been developed privately by Sonnen which is offering a low-cost power service to Australian households under such a product offering. This order will make Tesla the biggest provider of solar plus storage systems in the world with about 250 MW of capacity and 650 MWh of storage. The government will support with tax incentives and loans.

You might also like Why Australia Building An Expensive Solar Thermal Power Even As PV Solar Plus Storage Goes Down To 3.6 cents

Besides Tesla, Huawei has also decided to enter the solar plus storage market in Australia. The company is launching its Fusion Home Smart Energy Solution which is compatible with a number of energy storage systems. The company will start off with LG Chemical batteries but wants to keep itself battery agnostic. This is an interesting move by Huawei as the company is not normally a big player in the installation business but more of a power electronics supplier.

List of Solar Installers In North India

1. Prachi Gupta – Delhi

pg@avante.in

Website –  www.ags.co.in

Business – Testing & Measuring Instruments, Solar PV Products, Hand Tools

2. Dipak Kumar Mukherjee

contact@del2infinity.xyz

Website – www.del2infinity.xyz

Business – Wind & Solar Energy Forecasting & Scheduling

3. Pankaj Bhatt- Delhi

pankaj@nedenergy.in

Website – www.nedenergy.in

Business – Battery Manufacturer for solar application

4. Vinod Kumar- Delhi

rk@synergymaxx.com

Website – www.synergymaxx.com

Business – Solar PV connector, Rooftop Solar System

5. akansh gupta – Delhi

sales1.nvodel@allwayslogisticsgroup.com

Website – www.allwayslogisticsgroup.com

Business – Solar EPC contractors

6. Vibhav Matiman – Gurugram

pvenergyinfra@gmail.com

Website – www.pvsolarpower.in

Business – Solar Power Plants

7. dhruva kumar – Delhi

mktg.hyd@vishalpipes.com

Website – www.vishalpipes.com

Business – Solar module mounting structure

8. Vishnu Datt – Sonipat

solar@loyalprices.in

Website – www.loyalprices.in/solar

Business – Solar Power Installations

9. Navdeep Singh – Chandigarh

navdeep.singh@sonnepower.com

Small and large scale solar projects

10. Mukesh Gaur – Ludhiana

mukeshgaur@sgpenergy.com

Website – www.sgpenergy.com

Business – EPC in solar solutions

11. Vijayant – Gurugram

vijayant.s@bbl-energy.com

Website – www.bbl-energy.com

Business – Solar EPC

12. Chandan Banerjee – Delhi

sushmita.automation@gmail.com

Business – Solar EPC

13. Gaurav Singh – Noida

gaurav@woltav.com

Website – www.woltav.com

Business – Led Lights and Solar Systems

14. Ritul Kakar – Delhi

salesmksolar@gmail.com

Business – Solar Power & Solar Water heating Systems

15. Anurag Kataria- Delhi

anuragkataria8@gmail.com

Business – EPC contractors, vendors, suppliers, buyers

16. Aditya Yadav- Delhi

contact.savitrenergy@gmail.com

Business – Installation of Solar PV Systems

17. Roopak Sharma- Delhi

info@amogeo.com

Website – www.amogeo.com

Business – Solar PV and Thermal

18. Tushat – Delhi

tchugh@winnerspitch.com

Website – www.winnerspitch.com

Business – Solar EPC

19. Saurabh Sharma – Ghaziabad

saurabh@archtronicsystems.com

Website – www.archtronicsystems.com

20. Rahul Harshvardhan – Noida, UP

rahul.harshvardhan@ itsmysun.co

Website –  https://www.itsmysun. com/

Business – Mysun is a leading Rooftop Solar and Solar Installer Company, providing solar solutions for Industrial and residential verticals

100 GW Solar Plus Wind Tenders in India

India’s Ministry of New and Renewable energy (MNRE) plans to tender out 100 GW of solar plus wind tenders over the next 3 years. They have also given a tentative plan of the capacities that will be tendered out. The ambitious plan has 17 GW of solar power that will be up for grabs in the next four months itself which is huge given that the current cumulative installed capacity of solar is less than 15 GW.

  • 3GW in December 2017
  • 3GW in January 2018
  • 5GW in February 2018
  • 6GW in March 2018

Also, read India Plans A Massive 20 GW Solar Tender – The World’s Largest Solar Tender

solar panels india

This will be followed by another 30 GW each in 2019 and 2020 plus 10 GW each of wind tender which will get to the 100 GW new capacity. However, these plans seem to be more like castles in the air as most of the issues remain unresolved. With a large number of states being in a power surplus who is going to buy all this power? Demand growth in India has been tepid at best given that industrial demand has been lackluster over the last few years and energy efficiency has improved. While there remains large unmet demand in certain areas, the distribution companies remain in an indebted state not serving paying customers. The UDAY scheme for the reform of the last mile system still remains a work in progress.

On the supply side, there are issues related to land availability, transmission infrastructure, and off-taker issues. A solar plant in Andhra Pradesh could not sell power for 4-5 months till NTPC had to intervene and bundle cheaper thermal coal power to get a distribution utility to buy that power. 17 GW of solar power in just 4 months will be impossible to sell even if the government comes out with a tender.

Another plan of tendering out 20 GW for domestic manufacturers remains extremely short on details on how the developer and manufacturer of solar panels will work together. Grandiose plans rather than workable plans seem to be the order of the day. With the extremely efficient Piyush Goel shifting to the railways ministry, the power and renewable energy ministry have looked extremely ineffective over the last few months. Tenders for solar energy have dried up leaving the industry in a lurch. The few and far tenders have seen fierce competition leading to abnormally low prices.

Instead of tendering, the government should create a market-driven mechanism for developing and selling power in the country which should be transparent and available at affordable prices.