In Conversation with Mr. Manish Gupta, President NIMMA (North India Module Manufacturer Association)
Proposed Safeguard Duty on Module/Cells Import…What are your views on this
The domestic industry is experiencing significant losses and increasing unsold inventory due to cheaper imports specifically from countries like China, Taiwan and Malaysia.
While the move is expected to alleviate the financial challenges of domestic manufacturers, thus bolstering the government’s Make in India efforts, the increased cost of solar cells may invariably cause project costs to rise, which poses threat to the government’s target of installing 100 GW of Solar Photovoltaic Plants by year 2022.
With rising demand for cleaner energy and financial woes of domestic manufacturers, the government is certainly seeking to balance the two sides.
What is your suggestion regarding Safeguard duty to Government / Foreign Module Makers / Indian Manufacturers / Developers / Policy Makers / Regulators etc..
70 percent duty which is proposed by the Directorate General of Safeguards Duty (DGS) is on the higher side & which will adversely affect the solar projects in India. The cost of power generation will significantly go up, & achieving Grid parity will be a tough task. In addition, such a high level of safeguard duty will raise the working capital of manufacturers leading to high fund cost. Our view is some reasonable amount of duty should be imposed which is a win-win situation for project developers & manufacturers.
What according to you are the current opportunities, biggest challenges, in Indian Solar Market?
- Current Opportunities: - Cumulative Solar Installation has crossed 16 GW in India with 7 GW added in 2017.
- Out of this the rooftop installations have crossed 1 GW mark & approximately 850 MW was added in 2017.
- It is forecasted that 8 GW of installation will take place in 2018 which offers ample of opportunities for manufacturers.
- Renewable comprise almost 18% of the India’s total installed capacity with solar accounting for nearly 4.5%
- The India Government has doubled the planned generation from solar parks to 40 GW from 20 GW.
- Biggest Challenges are various duties which are imposed on Indian Manufacturing units like GST, Safeguard Duties, and Import Duties & BIS Certification.
Impact of GST on Solar?
- Imposition of GST on Solar effective 1 July 2017 on modules which was earlier exempted in most states are now taxed at 5% .
- GST on other solar components varies from 5%- 18%.
- More than 500Cr input tax credits pending with the Government resulting in high working capital cost.
- There are lot of variations in tax structure on different components which is resulting in uncertainty in market
Expectations from Indian Government:
Government should rationalize GST for domestic manufacturers to help them achieving their target & better sales opportunities. Some incentive schemes for enhance and upgrade of manufacturing capacity like to be purposed by Govt. Tax exemptions should be given to residents for rooftop installations so as to encourage mass application of solar.
Aggressive Bidding despite of many challenges enlisted above, what is your view/opinion
Recent aggressive bidding by developers has put the viability of the projects at stake.
With bids as low as INR 2.44 /unit the commercial viability of the projects are questionable. With the proposed safeguard duty & import duty the impact on ongoing projects will be very detrimental. It is yet to be seen that how many projects will actually see the light of the day.
What are your plans for India, your view on the GOI target of 100GW Solar Power by 2022
The government has set itself a target of 100 GW of solar power by 2022, of which 60 GW is to come from utilities and 40 GW from rooftop solar installations. While the 60 GW target seems achievable, the country is lagging behind on the target set for rooftop solar. We are also planning to double our capacity in next year.
What will be the cost, technology trends in solar pv modules
Indian Solar Power Industry is anticipated to have double digit growth during next few years, due to the government’s policy to increase the share of solar power in the country’s energy mix and falling equipment (PV Module) costs globally. Moreover, solar power tariff in India has witnessed a drastic fall over the last few years.
The solar power tariffs in India have fallen in nominal terms from INR 15 /Kwh in 2009 to INR 2.44/ Kwh in 2017, due to decline in module prices and improvements in capacity utilization factor.
The ever-declining solar power tariffs has encouraged good investments into the sector but have raised concerns over the long -term sustainability of the projects.
Improving manufacturing technology has led to the reduction in cost of solar panels which has resulted in reduction in cost of solar power generation. The reduction in the cost of solar power coupled with strategic policy of the government has resulted in increase in solar power into the energy mix of the country.
To boost the solar power generation in the country, the Government of India has announced various policies and regulations, such as, accelerated depreciation, capital subsidy, Renewable Energy Certificate(RECs), Net Metering Incentives, Assured Power Purchase agreement etc. The schemes formulated by the government intends to reduce the capital expenditure in building a solar power plant, and subsidize the power generation to make it economically viable for the stakeholders involved in the solar power business.