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Teri: Imposition of safeguard duty on imported solar panels to result in higher cost

This move is also likely to result in higher average power purchase cost (APPC) for the buying utilities and higher costs to the consumers, Teri said in a statement.


PTI 01 Aug 2018, 05:13 PM India

The imposition of safeguard duty on imported solar panels will result in higher cost for future solar power projects, impacting the sector's competitiveness, The Energy and Resources Institute (Teri) said today.

This move is also likely to result in higher average power purchase cost (APPC) for the buying utilities and higher costs to the consumers, Teri said in a statement.

According to the statement, over 90 per cent of solar panels and modules used in Indian projects come from China and Malaysia, and the proposed safeguard duty is intended to protect domestic solar panel production from impacts due to increased imports.

It said that duty on imported modules will increase solar power tariffs by around Rs 0.38 to Rs 0.50 per unit.

"Levying of safeguard duties may not help the domestic industry. It would, on the other hand, increase the cost of solar power, making it less attractive to the buying utilities, and thus jeopardizing the pace of growth of development of solar power...," Teri Director General Ajay Mathur said.

A better option for the government to promote domestic industry is to competitively procure, for its own use, solar electricity generated from only domestically manufactured panels, he added.

India's solar industry is growing rapidly and is one of the cornerstones of a sustainable future for the country. However, the industry is still at a nascent stage and requires constant policy support for a favorable environment for growth, it added.

As per the Ministry of New and Renewable Energy (MNRE), the present domestic manufacturing capacity of solar cells and solar modules is about 3.1 GW and 8.8 GW, respectively, whereas the 1.5 GW of solar cells and 2.0 to 3.0 GW of solar panels are installed annually; only 10 per cent of the installations use domestic cells and modules, the statement said.

The main reason for under-utilization of the installed domestic manufacturing capacities is the inability of domestic manufacturers to compete with foreign manufacturers due to lack of economies of scale, technology performance and higher cost of the capital borrowed from banks and NBFCs, it added.

It also suggested that the government needs to balance the solar deployment targets and needs of the solar manufacturing industry.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)


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