Last month, the Indian government decided not to impose antidumping duties on solar cells and modules imported from China, Malaysia, Taiwan, and the United States. The step has been celebrated by many within the industry as a win for solar. To gain a greater understanding of what this means for the future of the Indian solar market, SolarCurator’s Nick Richardson interviewed Jasmeet Khurana, senior manager of one of India’s leading solar consulting and market intelligence firms, Bridge To India.
What does the government’s decision not to impose antidumping duties mean for the Indian market?
The decision to revoke the antidumping duties stems from the fact that the government, as a policy decision, has prioritized addition of power capacity over providing impetus to domestic manufacturing for solar PV. Instead of growing the domestic installed capacity at par with manufacturing capacity, the Indian government has decided to decouple the two and drive expansion in local manufacturing capacity through a set of new solar projects with domestic content requirements (developed by public companies). The key impact of this decision will be twofold: a debottlenecking in the industry now that there is clarity and a continuation of competitive pricing of solar power. Policymakers now have room to be ambitious about new installed capacity targets.
How much stability does this bring to the market?
As the solar sector is still largely dependent on policy support, any instability in governmental policies is a major dampener in the sector. Uncertainty increases the risks associated with solar investments. Antidumping duties were a constraint on the supply side of the equation, which primarily would have impacted the cost as well as access to volumes. With the duties being revoked, the supply side constraint has more or less been taken care of. However, the demand side constraints in terms of incentives and obligations that drive the adoption of solar still persist. The government now needs to follow up with an ambitious, detailed and long-term vision for the development of solar in India.
Has the uncertainty caused by the government’s deliberation on the matter had a noticeable effect on the Indian market?
Yes. The uncertainty caused a lot of project developers to put their projects on hold as the imposition of antidumping duties could have made these projects unviable. This three-month period of uncertainty translated into delays in the commissioning deadlines for a fairly large number of projects. Bridge to India had projected that over the next year, India would have installed 1.6GW capacity if the duties were not proposed in the first place. Due to the uncertainty, we expect that a capacity of 600MW will be delayed beyond the next year. If antidumping duties were to be enforced, a large part of the delayed capacity would have been scrapped or would have got delayed indefinitely on account of litigations.
The Ministry of New and Renewable Energy (MNRE) is widely viewed as the leading advocate for solar and renewables in India. How significant were they in ensuring antidumping duties were not introduced?
The MNRE played a crucial role in ensuring that the duties were not enforced. The ministry took a public stand against the duties as it would harm the market.
What are the short-term priorities for the Indian market?
The short-term priorities of the Indian government are to create a predictable policy environment. That will help the entire market: power consumers, developers, suppliers, manufacturers, etc. Key aspects of that are dependable deadlines, transparent processes, clear targets and responsibilities, and realistic and reliable policy mechanisms.
How realistic is achieving the National Solar Mission’s 20GW by 2022 now?
Most industry stakeholders agree that the 20GW target can easily be achieved. In fact, Bridge to India is of the view that this target is not ambitious at all, especially since the target was set before the solar costs reduced dramatically. Please refer to our most recent report, “How should India drive its solar transformation? Beehives or Elephants,” which suggests that the realizable potential in the next 10 years is 145GW.
PHOTO OF NEEMUCH SOLAR PROJECT COURTESY OF GE ENERGY/WELSPUN
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