While the Jawaharlal Nehru National Solar Mission has received good response, with investment proposals totalling over Rs 1,00,000 crore over the next three to 10 years, an emerging issue is whether cheaper imports should be allowed or there should be protection for the domestic industry.
Equipment manufacturers are seeking parity with international players (specially Chinese) before the JNNSM takes off, in line with the Ajay Shankar committee report, which recommended mandatory domestic content for grid-interactive solar units. Solar power generators, on their part, are apprehensive that this would lead to higher generation cost.
Domestic solar equipment manufacturers say they are at a disadvantage as compared to Chinese manufacturers. Indian manufacturers pay four per cent Value Added Tax (VAT) on equipment, while import duty on solar cells and modules is nil. “Besides, there are certain duties on raw material which increase the indigenous manufacturing cost. Disparities in incentives for Indian manufacturers vis-a-vis international (Chinese) modules should be adressed,” says K Subramanya, Chairman of the Ficci Solar Energy Task Force (and CEO of Tata BP Solar India Ltd).
Subramanya recently led a delegation (comprising top executives from Moser Baer Photovoltaic, Mahindra Partners, IndoSolar, etc) of the industry to the principal secretay to the prime minister, T K A Nair and R P Singh, secreatry, Dapartment of industrial policy and promotion, and to Farooq Abdullah, Minister for New and Renewable Energy, in this regard.
The industry also says bankability of the power purchase agreement is critical for a favourable investment climate for the JNNSM. It also opposed the proposed reverse auction framework for project selection, saying it would lead to negative bidding and is precarious for an infant industry like solar. It asked the government to adopt the Central Electricity Regulatory Commission rate structures, based on normative costs. The representatives saif many countries such as Germany, Italy and Spain avoided competitive bidding for this reason.
DIFFERENCES ON SHANKAR REPORT
While there is unanimity in the industry on these issues, there is not so on implementation of the Ajay Shankar committee report. The report recommends use of domestic modules in JNNSM projects. Solar power generators say implementation of the report would lead to project delays and higher cost of generation. “The government should not implement the report in the first phase. We have only three-four players in thin film technology modules. Dearth of the technology will lead to project delay and monopoly. Though a few big players have plans to manufacture thin film modules, it will take at least two to three years to be self-sufficient in the technology,” says L Adimoolam, managing director, RL Clean Power Pvt Ltd, who has been taking up this matter with the ministry. RL Clean Power has five Mw of solar power producing capacity.
There is dearth of players manufacturing the apt modules in India. Due to India’s geographic position, the sunlight does not fall on the modules directly, which reduces the efficiency of the cell. For that reason, mono crystalline and poly crystalline technology is not successful here and thin film technology is the ideal. Out of 60-odd manufacturers, only a few are manufacturing thin film modules. Moreover, within the existing technology, most of the manufacturers are exporting 80 per cent of their products. Even if the government discourages export, they would not be able to stop supply to the existing vendors, due to contract liabilities.
