Solar Power Developers Association seeks exemption on solar equipment for ongoing projects
Hyderabad: Solar Power Developers Association (SPDA) has sought exemption of safeguard duty on solar equipment for ongoing project. The duty will not only put the ongoing projects in risk but also will kill thousands of job created, mostly in rural India, from the down-stream activities of solar power generation including the manufacturing sector.
SPDA president Vineet Mittal told Telangana Today, “We have sought exemption of safeguard duty on solar equipment for ongoing projects. We are pleading the government to keep solar equipment out of the purview of the proposed safeguard duty, particularly for ongoing projects. Safeguard duty is adding uncertainty in solar generation.”
He said, “Indian companies had been primarily assembling the cells after they were imported. They will be outplaced by overseas companies if the duty is imposed both in terms of efficiency and cost. It will make the assembling costly.”
In a letter to Commerce Secretary, who is also Chairperson of the Standing Board on Safeguards, on July 18, 2018, the SPDA said, such recommendations on safeguard could jeopardise availability of low cost energy to the consumers, making the investments of more than Rs 1 lakh crore unviable.
The Directorate General of Trade Remedies (DGTR), in its recent report, has recommended imposition of safeguard duty on imports of solar cells/modules into India for a period of two years.
“India imports upto 70 per cent of solar modules and panels at present, mostly from China, Taiwan and Malaysia. This duty would be 25 per cent ad valorem in first year, 20 per cent ad valorem in the first half of second year and 15 per cent ad valorem, subsequently. However, the safeguard duty has not been imposed so far.
The SPDA pleaded to the board to protect ongoing solar energy projects (wherever bids concluded) with complete exemptions from the imposition of any safeguard duty. According to the association, the viability of around 27,000 MW projects involving the investment of more than Rs 1 lakh crore is at stake as the cost of these projects will be additionally burdened by 20 per cent with present recommendations on safeguard.
As a result, entire solar mission will lose its objective endangering thousands of jobs, many interdependent micro, small and medium enterprises (MSMEs) catering their goods and services to this sector and finally turning these projects into NPAs (bad loans), he noted.
He added, “India currently has 21 GW installed capacity. The country has set an ambitious target to achieve 100 GW of solar energy generation by 2022, meaning there needs to be an addition of 79 GW capacity. The government has planned to auction 60 GW solar energy projects by March 2020 to achieve the target. India’s solar energy consumption is still not on par with the world average, as its power per capita stands at just one-third of the global average”
The SPDA pointed out that their submissions are not regarding appropriateness of the duty or its quantum rather about its applicability or treatment of this duty on the ongoing projects which have been allocated at the tariffs discovered under the competitive bidding process.
The industry body also said that it is likely that distribution companies (discoms) will not take the burden of increased tariff and would certainly oppose any such pass-through in the tribunals and courts. Moreover, it said that the discoms will not purchase solar power as soon as the tariff increases above Rs 3 per kWh on account of safeguard duty.
Source: telanganatoday
