Some of the most important ones include imposition of Basic Customs Duty (BCD), Product Linked Incentive (PLI) Scheme, Approved Lists of Models and Manufacturers (ALMM) enlistment, bringing in Bureau of Indian Standards (BIS) certification, and making ‘must-run status’ for renewable energy units mandatory.
The proposed implementation of BCD, a longstanding appeal from the industry, has brought cheer to domestic solar manufacturers. As per ICRA, imposition of BCD coupled with the PLI Scheme will improve the cost competitiveness of domestic PV module manufacturers against imported modules by more than 10 per cent at the prevailing imported module prices, under assumption of backward integration up to cells and polysilicon.
The domestic manufacturing industry lauds the steps taken by the Government of India to protect the industry’s interests but it also needs to take into account some other aspects of the implementation of these policies.
The issue that requires immediate attention is the absence of duty barriers for imports of solar modules from the date of Safeguard Duty expiry to the date of implementation of Basic Customs, that is between July 2021 and April 2022. The window presents Chinese manufacturers a chance to dump their modules in India. This is a concern because the duties on import of raw materials will continue to be levied. As opined by leading domestic manufacturers, this nine-month period would have a significant effect, which may also lead to shutdown of units in India and risk for solar jobs.
This issue is further aggravated by the shortage of raw materials. Over the last few months, the price of pure metallurgical silicon, the most important raw material for solar cells (mainly imported from China), rose by 35 per cent according to news agency Bloomberg. According to Mercom India Research, freight charges, too, have shot up with the Covid-19 pandemic gathering momentum, with charges as high as INR 222,182 to INR 259,212 per container. Government should extend existing safeguard duty on solar panels for nine months until BCD is applicable.
It should also help the module manufacturers to build partnerships across various sectors. For instance, it can create new opportunities by making it mandatory to power army facilities at the borders and EV charging facilities through domestic solar modules. The government should also look at offering capital subsidy for setting up R&D facility to support manufacturers in creating and developing new products and solutions.
The industry needs stronger policies to sustain – the government owes it to the nation to take the nascent solar manufacturing industry under its wing and nurture it.
[This piece was authored by Bharat Bhut, Co-Founder and Director, Goldi Solar]
[DISCLAIMER: The views expressed are solely of the author and ETEnergyworld.com does not necessarily subscribe to it. ETEnergyworld.com shall not be responsible for any damage caused to any person/organisation directly or indirectly]