Directorate General Recommends 70% Provisional Safeguard Duty on Imported Solar Cells

In a preliminary finding, the Directorate General of Safeguards Customs and Central Excise has recommended a 70 percent safeguard duty on solar cells imported from China and Malaysia for a period of 200 days.

The recommendation comes in the heels of a petition filed by the Indian Solar Manufacturers Association (ISMA). A public hearing will be held before making a making a final determination in the matter.

The petition was initially filed on December 5, 2017 by ISMA on behalf of domestic manufacturers including Mundra Solar PV Limited, Indosolar Limited, Jupiter Solar Power Limited, Websol Energy Systems Limited, and Helios Photo Voltaic Limited. The companies claimed that they collectively manufacture more than 50 percent of all solar cells manufactured in India. The applicants had requested immediate application of a safeguard duty for four years.

The preliminary finding is based on the data submitted by the domestic manufacturers and would be subject to further scrutiny.

The Directorate General of Safeguards noted that even though the petitioners had requested the imposition of safeguard duty on China, Taiwan, Malaysia and Singapore, other than China and Malaysia, the solar cell imports did not exceed 3% individually and 9% collectively. Hence, the DGAD’s provisional safeguard recommendation is restricted to only Chinese and Malaysian cell manufacturers.

In the report, the Directorate General mentioned that the petitioners include Special Economic Zones (SEZ) units who qualify to be treated as a domestic industry. But according to the SEZ Act 2005, Section 30, any goods movement from an SEZ unit into the domestic tariff area is open to duties of customs including a safeguard duty, where applicable. So any product sold by an SEZ unit into the domestic market will attract the same safeguard duty as the imports from China and Malaysia. To put it simply, the petitioners who operate in SEZs would not only lose the protection of the safeguard measure, but they would themselves be subject to the safeguard duty. In which case there would be zero benefit for petitioners from SEZ, while the entire industry would be upended.

Speaking to Mercom, an official at the office of Directorate General said, “Even if these petitioners are in SEZ, they are producing in India and then exporting it elsewhere. They function in the country and follow the laws just like any other domestic manufacturer. The only difference is that they have some relaxations as they are in SEZ, but that doesn’t mean their petition won’t be considered. They are a part of the domestic manufacturing diaspora.”

A large domestic manufacturer told Mercom: “I do not understand this petition. First, there are regulations that the manufacturing units in SEZs won’t be counted as part of the domestic manufacturing capacity. Now, the petitioners are in SEZs. If a safeguard duty is imposed, they will also have to pay. Or the laws and regulations governing SEZs need to be changed to accommodate these companies not paying the duty. This petition is like these people are putting their own feet on the axe.”

We were not able to get a response by any petitioners when we contacted for comments.

As we have reported before, most manufacturers do not want anti-dumping imposed on foreign made cells as the domestic cell manufacturing capacity is not enough to replace imports. This petition adds to the uncertainty in the sector where project development risk is increasing with new challenges popping up every day.

ISMA has already filed an anti-dumping petition in June with the Ministry of Trade and Commerce, against solar modules and cells from China, Taiwan and Malaysia.

Source: Mercom

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Government unlikely to scrap customs duty on import of solar panels

Plea by MNRE secretary to give duty relief to solar power developers turned down at a meeting of government stakeholders.

BENGALURU: The government appears to have turned down a plea by the Ministry of New and Renewable Energy (MNRE) to scrap import duty on solar panels imposed last year, according to the minutes of a meeting held earlier this month.

The renewable energy ministry had backed the demand by solar developers that such equipment should continue to be exempted from duty.

This would mean developers getting equipment from overseas having to pay levies that add up to about 10%, possibly reversing the decline in solar tariffs in successive auctions in the past three years unless power producers choose to absorb the extra cost, experts said. However, developers that quoted tariffs based on a zero-duty calculation in past auctions may get some relief.

The minutes of the December 6 meeting held by finance secretary Hasmukh Adhia and attended by government stakeholders indicate that the change will stay in force and developers will lose the concession that’s been in place since India’s solar programme began in 2010.

Government unlikely to scrap customs duty on import of solar panels

ET has seen a copy of the minutes, signed by Zubair Riaz Kamili, director, customs.

“Policy intervention in the form of customs duty exemption may not always be the ideal way to promote growth of solar power generating industry in the country, particularly when the import is also being investigated by DGAD (Directorate General of Anti-Dumping) for possible dumping, besides safeguard protection,” finance secretary Adhia is cited as saying in the minutes.

He agreed however that developers that had already quoted tariffs and won projects expecting customs duty to be nil should be protected, and asked the MNRE to give him a list of such developers and projects. This was in response to MNRE secretary Anand Kumar saying that the imposition of customs duty “will cause distress to importers who have already bid for solar power projects and quoted power tariffs,” according to the minutes.

The Central Board of Excise and Customs (CBEC) ended its longstanding policy of exempting imported solar panels and modules from customs duty last year, imposing a levy of 7.5%, along with various cesses, adding up to about 10%. More than 90% of solar panels and modules used in Indian solar projects are imported, mainly from China, Malaysia and Taiwan.

A CBEC notification in September last year said solar panels and modules should not be classified along with diodes, semiconductors and related electronic equipment (under customs code 8541) but with electrical motors and generators (customs code 8501), which attract 7.5% basic customs duty plus cesses. This doesn’t appear to have been implemented however for a year and solar equipment importers weren’t aware of the change.

Implementation began only in September this year, initially at Chennai port and later at other ports as well. MNRE secretary Kumar argued at the December 6 meeting that this would raise solar tariffs and adversely impact the country’s ambitious solar programme, according to the minutes.

The Department of Industrial Policy and Promotion (DIPP) backed the revision, maintaining it would help local solar manufacturers compete with global ones and was thereby in keeping with the Prime Minister’s Make in India policy. Imports are around 25-30% cheaper than locally made solar equipment mainly due to economies of scale and hidden government subsidies.

Developers had initially resisted paying the duty at Chennai, leading to equipment piling up at the port. They have since begun paying and clearing goods for fear of missing project deadlines.

In November, MNRE minister RK Singh wrote to finance minister Arun Jaitley that solar modules had been exempted because they tapped renewable energy. MNRE secretary Kumar made the same argument to CBEC board members.

Solar developer Acme Solar, among the worst affected, has moved the Madras High Court against the new classification. At the December 6 meeting, the customs representative said the new classification was based on “Harmonised System of Nomenclature followed all over the world for the classification of goods” and argued that any exception for solar panels and modules should be spelt out clearly in the rules, according to the minutes.

The DIPP secretary “emphasised the cause of Make in India and stated there was a need to promote manufacturing of solar panels and modules in India, and that the domestic industry needed protection of at least 30% so as to have a level playing field vis-a-vis imports.”

The commerce ministry representative noted that, on the basis of complaints made by local manufacturers, DGAD had initiated “anti-dumping investigation into the import of solar panels and modules from China, Malaysia and Taiwan.”

The DG Safeguards said his office had received a representation from local manufacturers to impose safeguard duty on imported solar goods.

Source : ET

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UPERC Adopts Renegotiated Tariff of ₹7.02 for Solar Projects Tendered in 2015-16

The Uttar Pradesh Renewable Energy Commission (UPERC) has adopted a renegotiated tariff of ₹7.02 (~$0.11)/kWh as the new tariff for solar projects tendered in financial year 2015-16. This is negatively affecting 215 MW of grid-connected solar projects and hampering the growth of solar in the state.

UPERC was overseeing the tariff renegotiation in the state of Uttar Pradesh. Replying to a petition by Uttar Pradesh Power Corporation Limited (UPPCL) and Uttar Pradesh New and Renewable Energy Development Agency (UPNEDA), UPERC stated, “The Commission adopts a tariff of ₹7.02 (~$0.11)/kWh for the developers whose projects are complete.”

The tariff of ₹7.02 (~$0.11)/kWh will be applicable for a period of 12 years after which the developer will supply power to UPPCL at the average pooled power cost (APPC), which cannot be more than ₹7.02 (~$0.11)/kWh, stated an official at UPERC.

In all, 215 MW of grid-connected solar projects will be affected by this renegotiation. Out of the 215 MW, grid-connected solar projects totaling 135 MW have been commissioned.

Out of the nine companies that have commissioned projects, six are not ready to sell power at the renegotiated tariff. The UPERC order has paved the way to sign PPAs for 60MW of grid-connected solar projects out of a total auctioned capacity of 215 MW.

Six other developers that have yet to commission their projects are in danger of losing out on a PPA. The UPPCL has asked the UPERC if it wants to terminate the PPAs for these projects due to delays in project commissioning. The UPERC is yet to decide the fate of these projects, which total 80 MW.

According to Mercom’s India Solar Project Tracker, the current installed capacity of grid-connected solar in Uttar Pradesh is over 600 MW. The capacity addition has been very slow and if conditions like these persist, the state will have to outsource its solar power needs. But even that would be troublesome as few developers would be interested in selling power to a state with a history of reneging on contracts.

The Solar Energy Corporation of India (SECI) had tendered a total of 750 MW of solar at the Bhadla Solar Park in Rajasthan to supply power to Uttar Pradesh to fulfill demand.

Mercom reported in August 2017 that the National Solar Energy Federation of India (NSEFI) sought an extension of the project commissioning timeline for six solar projects in Uttar Pradesh.

Source: MERCOM

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Solar power developers flouting domestic content norms may face penal action

India plans to penalize solar power firms that are using foreign equipment in projects awarded on the basis that they would only use locally made solar panels and cells
As solar panels account for nearly 60% of a solar power plant’s cost, companies have been using Chinese imports to reduce costs.

As solar panels account for nearly 60% of a solar power plant’s cost, companies have been using Chinese imports to reduce costs.

New Delhi: India plans to penalize solar power developers which are using foreign equipment in power generation projects awarded on the basis that they would only use locally made solar cells and modules, according to two government officials.

To curb such malpractices, the government will make it mandatory for developers to publicly disclose the radio-frequency identification (RFID) tag information of the panels used in solar projects. It will also be incumbent on the developers to share the RFID list of rejected panels.

Mint reported on 7 September that poor quality Chinese solar modules, rejected by developers, were being sold in the domestic market at a discount.

These projects, awarded under the so-called domestic content requirement (DCR) route by state-owned firms, are required to use solar cells and modules made in India. Also, under the solar roof-top scheme, the government gives subsidy on the condition that the modules should be made in India wherein solar cells can be imported.

“We are trying to attack that (malpractices). We have seen that under the DCR projects there have been instances wherein Chinese imports have been used,” said a senior government official, one of the two cited above, requesting anonymity.

Solar modules or panels account for nearly 60% of a solar power project’s cost. For China’s solar panel manufacturing capacity, estimated to be around 70 gigawatts (GW) per year, the major markets are the US, India and China itself.

“A case has been brought to our notice wherein a firm has put Chinese component under the DCR programme. We will take action against such cases. We are looking into such practices…We are looking into cases wherever we receive a complaint that under the DCR somebody has used foreign component,” the official added.

Indian companies are aware of the malpractice.

“The entire policy faces a risk when companies start flouting the existing rules which are there to promote domestic manufacturing and local jobs. It’s basically kind of profiteering out of a policy custom made for local jobs and it’s very important that the investigation is carried out in a time-bound manner and suitable action is taken against the people who are doing such activities,” said Ketan Mehta, managing director and chief executive of Rays Power Infra, a solar project developer.

The Indian government introduced stringent quality norms in August for solar equipment to be sold in the country and made the destruction of sub-standard equipment mandatory.

“We are planning that RFID of each module has to be captured and uploaded somewhere so that cross-checking happens. Rejected modules RFID will also be captured,” said another government official who also didn’t want to be identified.

Also, there have been allegations of government subsidy being availed multiple times on the same set of panels at multiple locations.

“Problem is more where it is subsidy related. A case in point being roof-top solar projects where the common man doesn’t know what quality he is getting. All those things have to be captured in RFID,” said the second government official cited above.

Of India’s plan to add 100 gigawatt (GW) of solar power capacity by 2022, 40GW is to come from roof-top projects.

“It can also happen that someone puts a panel on a rooftop and claims subsidy and then removes it and puts it on another rooftop to claim subsidy. There is a possibility of it happening. This kind of thing will prevent it,” added the second official.

Queries emailed to a spokesperson for the new and renewable energy ministry on 16 November remained unanswered.

“Tracking of modules on a central data base not only gives convenience to the buyer that they can check the manufacturing date, name of the module and its quality on a central data base but also it will help government in tracking a single module not being used on two or three places and claims the benefits again and again in terms of subsidy and shift to some other places,” added Mehta of Rays Power Infra.

With the average efficiency of a solar panel usually just 16-22%, sub-standard quality will impact generation. India has also been conducting an anti-dumping investigation on solar equipment from China, Taiwan and Malaysia.

Source: LiveMint

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MNRE Implements Quality Control Measures to Address Low Quality Solar Equipment


The Ministry of New and Renewable Energy (MNRE) has begun implementing a quality control order that requires manufacturers to register with the Bureau of Indian Standards for the use of a “Standard Mark” to comply with the Indian quality standard.

The order, titled “Solar Photovoltaics/Systems/Devices/Components Goods (Requirements for Compulsory Registration) Order, 2017” is scheduled to become effective on January 1, 2018. The MNRE has asked stakeholders to provide views and comments by November 28, 2017.

The order was initially slated to come into force on September 5, 2018, one year after its date of publication in the Official Gazette of the Government of India. However, the MNRE shortened the waiting period to speed up the start of order enforcement. The draft technical regulation for the order was first released in August 2016.

Speaking about the order, an MNRE official previously told Mercom, “This is a necessary step, we have been hearing from stakeholders that project quality should improve, and this order will take care of the quality of materials utilized.” The official added that the order is also expected to stop the supply of below-par modules and other supplies to India and increase the project capacity utilization factor (CUF).

When asked why the order is being enforced nine months ahead of its original commencement date of September 5, 2018, the same MNRE official said, “Not much tendering has been done in the past few months, in the new financial year all developers and tendering agencies will plan their market strategies, it’s better that the policy is in place before a flurry of activity begins.”

The MNRE official went on to say that implementing the order before the start of the next fiscal year will give all stakeholders ample time to understand its implications and adjust accordingly.

Of late, the MNRE has been tying up loose ends in an effort to improve project quality. Recently, the MNRE also issued a clarification for the DC system configurations applicable to off-grid and grid-connected solar PV applications.

All of this activity comes as some developers are cutting corners to make project economics work in the current highly competitive auction environment. There is concern in the industry that many of these projects may not last 10 years, let alone the full length of their 25-year PPAs.

Source: Mercom

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KERC Sets New Benchmark Tariff of Rs.4.36 (~$0.064)/kWh for Grid Connected Large-Scale Solar Projects for FY2017-18

The Karnataka Electricity Regulatory Commission (KERC) has set Rs.4.36 (~$0.064)/kWh as the benchmark tariff for grid-connected large-scale solar projects for financial year (FY) 2017-18. The new benchmark tariff will be applicable to all new grid-connected MW-scale solar PV projects entering into power purchase agreements (PPA) on or after April 1, 2017, and before April 1, 2018.

The new benchmark tariff is Rs.2.15 (~$0.033) less than the benchmark tariff of FY2016-17. The KERC has taken into consideration the declining module prices while determining the new benchmark tariff.

The KERC had proposed a new benchmark tariff in March of Rs.4.51 (~$0.066)/kWh for solar PV projects. The final benchmark tariff set is about 3 percent lower.

The KERC has regulated, the tariff determined will also be applicable to those grid connected megawatt-scale solar PV projects for which PPAs were entered into before April 1,2017, but, are not commissioned within the specified commercial operation date (COD) and achieve COD during the period from April 1, 2017, to March 31, 2018. The approved tariff in respect of solar thermal projects will continue per the commission’s order dated July 30, 2015 and solar rooftop PV projects will remain the same per the commission’s order dated May 2, 2016, until March 31, 2018.

In the new tariff order, the KERC has also specified a debt repayment period of 12 years for project developers.

According to Mercom’s India Solar Project Tracker, Karnataka has 1.1 GW of installed solar capacity as of March 31, 2017, and almost 2.9 GW of development pipeline.

Source: Mercom

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Solar alliance brings sunshine to Bonn summit via Common Risk Mitigation Mechanism (CRMM)

A multilateral market platform for financial risk mitigation proposed at the Bonn climate summit is expected to create a transformative ecosystem for solar power in tropical countries

Countries with high solar power potential have put their muscle behind a common risk mitigation mechanism that could unlock up to USD 15 billion of investments to add 20 GW of photovoltaic capacity in more than 20 countries.

The proposed Common Risk Mitigation Mechanism (CRMM) is a multilateral market platform that has received initial support from countries that include India, France, Australia, Mali, Namibia and Nigeria, among others. A CRMM feasibility study released at the India Pavilion at the climate negotiations in Bonn outlines the 20 GW plan as a pilot phase with an eventual aim to leverage billions of dollars of impact capital to catalyse USD 1 trillion of domestic and international private institutional capital. CRMM could help build over 1 TW, or 1000 GW, of solar power generation capacity in low and middle-income countries by 2030, the study claimed.

The study was designed by a multi-stakeholder taskforce comprising the Council on Energy, Environment and Water (CEEW), the Confederation of Indian Industry (CII), the Currency Exchange Fund (TCX) and the Terrawatt Initiative (TWI) on the request of 17 signatory countries of the International Solar Alliance (ISA).

“As much as 75% of the cost of solar power is the cost of finance,” said Arunabha Ghosh, CEO of CEEW. “The pooling of risks would reduce double counting of risk variables, providing a single guarantee cover at prices lower than the additive price of existing insurance products.”

The study presents recommendations to governments of low and middle-income countries to accelerate their solar energy generation capacity, at scale and in local currency. The idea is to develop a sustainable financial ecosystem, centred around an international guarantee mechanism, which could pool various types of risks and pool projects across many countries to lower the costs of hedging against those risks.

Financing of solar power generation assets in a majority of developing countries suffers from a lack of risk mitigation tools, a high perception of risk among investors, high transaction costs, small project sizes, and lack of scale. Investors, developers, and other stakeholders need transparency and clarity of process, which is often missing in some countries. CRMM is designed to create a global solar market, boosting confidence among the international development community and private and public institutional financiers, to help meet international climate targets in countries with high solar potential.

The proposed mechanism is aligned with the aims of the ISA, jointly launched by India and France at the 21stConference of Parties at Paris in 2015. It is set to become a treaty-based intergovernmental international organisation on 6 December, with the Republic of Guinea becoming the 15th country to ratify the ISA Framework Agreement last week. The total number of ISA member countries has now increased to 44. “There are 121 countries totally or partially within the tropics of Cancer and Capricorn, and are therefore eligible to be full members of ISA,” Anand Kumar, Secretary at India’s Ministry of New and Renewable Energy (MNRE), said in Bonn.

“CRMM — the Paris Guarantee Fund — is a major step in the implementation of the Paris Declaration of the International Solar Alliance adopted on 30 November 2015 and of the ISA Programme aimed at mobilising affordable finance at scale,” said Upendra Tripathy, Interim Director General of ISA. “This instrument will dramatically lower the cost of finance for renewable energy and the overall price of electricity.”

The CRMM pilot phase will be launched in 2018. The aim of the pilot is to achieve a critical size and demonstrate its cost effectiveness in pooling and aggregating capital, and mitigating risks at an international level.

Indian experience

The Indian experience in developing large scale solar energy has shown that adequate distribution of risk is critical to project success. “The CRMM is a welcome announcement by the International Solar Alliance, and can give India an opportunity to show other developing countries a path forward towards accelerated solar deployment.” said Bhaskar Deol, CEO of Mynergy, which provides financing solutions for distributed renewable energy projects in India. “Success for ISA member countries will depend on their ability to mobilise finance for small scale, distributed solar projects, which suffer from risks such as off-taker risk, currency risk and policy uncertainly.”

Mudit Jain, senior manager at Bridge to India, a cleantech consultancy, said the biggest impediment for solar project development in low-middle income countries is the scarcity and high cost of capital. “If the CRMM mechanism can mitigate the political, off-taker and foreign exchange risks, it would definitely attract the low-cost capital, ultimately leading to large-scale solar deployment,” Jain told

“However, USD 1 billion may not be sufficient to attract USD 15 billion capital in low-income countries where the risk is much higher and will require higher provisions for risk mitigation. I presume that the pilot phase would be targeted in the countries with already existing mechanism to lower the aforementioned risks to a certain extent, including India.”

CRMM could have a positive impact because it will reduce the amount of effort that is required in raising funds, which is a major concern in India, according to Ritesh Pothan, an expert in the clean energy sector. “If it is able to reduce the interest rate and able to bring in a good rate, then there is a lot of scope for doing storage and a lot of scope for growth in the Indian market, not only from the solar perspective, but also from the ancillary to solar industry as well,” he said.

Many big companies in India are opting for onsite solar power projects – but most micro, small and medium enterprises and growing businesses – find it difficult to bear high initial cost of solar projects as availing finance is difficult. “Such an initiative will help the country in solar adoption,” Anshumaan Bhatnagar, Director of Sunshot Technologies Pvt Ltd, told

However, a lot of basic work will have to be done before starting any kind of mitigation process as part of this mechanism, says Ajith Gopi, Head of Technical Consultancy Division and Programme Officer at Agency for Non-conventional Energy and Rural Technology (ANERT), a government of Kerala organisation.

“Most of the investments are coming in the solar off-grid sector, which is a major area for South East Asian countries and sub-Saharan countries. The way to implement it is you have to find a strategy by getting a clear picture of how we can implement this in mostly the off-grid sector, since a majority of the companies are involved in the grid-connected market,” he said. “It will be very difficult for private companies to travel to remote locations and provide off-grid solutions to societies.”

This however would not be a major impediment to the solar energy initiative of India and other member countries, Indian officials said. Although coal will continue to be use in the Indian energy sector, “we’re going ahead with our focus on renewable energy and will have 40% of our power from renewable energy by 2040,” said C.K Mishra, Secretary at India’s Ministry of Environment, Forests and Climate Change (MOEFCC).

“We are targeting 1,000 GW (1 TW) solar in all ISA countries by 2030 (in addition to what has already been installed),” said Renewables Secretary Anand Kumar.

Source: India Climate Dialogue

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