Safeguard duty respite for solar developers in Maharashtra


In a ruling which will be greeted with a sigh of relief by solar developers in Maharashtra, the state’s electricity regulatory commission (MERC) has decided any PV projects commissioned before July 30 last year are entitled to safeguarding duty compensation.

The federal government had, on July 30, imposed a safeguarding duty on solar panels imported from China and Malaysia that kicked in at 25% before falling to 20% after six months and 15% six months after that.

But Maharashtra’s electricity regulator on Friday ruled the duty amounted to a ‘change of law’, meaning projects reaching financial close before that date would qualify for compensation related to the duty. The commissioners, however, refused developer calls to fix the level of compensation or to extend the deadline for projects qualifying for recompense beyond the day the duty was introduced.

The MERC order came in response to separate petitions filed by developers Tata Power, Acme Solar and Adani Green Energy, who had won 150 MW, 250 MW and 200 MW, respectively, in a 1 GW solar auction conducted by the Maharashtra State Electricity Distribution Co Ltd in May last year. The lowest tariff to come out of that auction was Rs2.71 and the winning bidders filed their petitions for compensation soon after the safeguarding duty came into effect.

Level of compensation to be determined

“The impact of the safeguard duty is dependent upon the period in which solar panel/modules are imported from China PR or Malaysia,” the order stated. “From the submissions of the petitioners, it is observed that they are in the process of importing the solar panels and hence exact impact of change in law is not quantified.

“Power producers shall approach the commission at later date for determination of increase in cost or/and revenue expenditure on account of imposition of safeguard duty, if any, and the mode of recovery of the same.”

The volume of solar modules imported to India has leaped from 1,275 MW in 2014-15 to 9,790 MW in 2017-18. Imports from China and Malaysia account for nearly 90% of that total.

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