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India to impose safeguard duty on solar panels imported from China and Malaysia and 90% of panels used in Indian project comes from these two countries. For first year duty will be 25% then 15% for 6 months and 10% of rest 6 months. Duty is in effect -from 30th July,2018.
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The duty will lead to increase in price of solar rooftop plant as the capital cost will increase by 20% and unit price of power by 40-50 paise. This will give a tough time to project developers and will further reduce attractiveness of solar as customers and utility will be required to pay more for the same unit of solar
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The decision should encourage domestic production –However, the decision will benefit only a small section of the domestic industry because a much larger proportion of the capacity to manufacture solar equipment in India is located inside Special Economic Zones (SEZs) and will not be exempt from payment of safeguard duty. Some large players in Indian market want reinterpretation of this decision.
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The other issue of concern is solar is economically viable and is gaining acceptability as it comes cheaper than grid power. But this duty is bound to make solar power barely competitive in comparison to the relatively reliable thermal power
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Making decentralized solar mandatory for small and mid size buildings will be a far more effective strategy for growth of solar industry, domestic manufacturing and employment generation.
Categories: News & Updates
