Policy

Citing high tariff of INR 3.48 ($0.050)/kWh as untenable, the Uttar Pradesh New and Renewable Energy Development Agency (UPNEDA) has cancelled the recent auction for the development of 1 GW grid-connected solar PV projects across the state.

India is currently the second largest market in the world for PV module demand. With China’s domestic demand frozen since the 31/5 notification, the country’s total module demand in 2018 will likely only achieve 32-34 GW. This will allow India, which may surpass 10 GW in annual demand, to reach 13% of global PV demand this year. As a result, the future of India’s trade war has become an influential factor in the global PV industry.

The remarkable 4 GW of solar capacity added last year has seen the state displace Tamil Nadu as the nation’s renewables top dog. And there is more to come, according to a new report, with PV set to account for a third of rising energy demand over the next decade.

Calling for a complete exemption of the 25% safeguard duty on solar equipment, India’s Solar Power Developers Association (SPDA) says, if imposed, it will jeopardize the viability of around 27,000 MW of solar projects involving an investment of more than Rs 1 lakh crore (around US$15 billion). Other key players also speak out against the tariff plans.

The proposed safeguard tariffs on imports from China and Malaysia are expected to generate a number of painful short-term impacts. Overall they are not expected to change much in the market, however, says TrendForce. What will have a bigger effect is the EU’s final MIP decision, due in September.

The two-year period of the recommended safeguard duty is very short, discouraging any investment in setting up new solar manufacturing capacity, say analysts and companies pv magazine spoke to. At the same time, for solar project developers, the duty will impact tariffs to the tune of 12-15%, posing an immediate threat to viability of projects under execution, they add.

Phased import tariff would fall to 20% 12 months after introduction and 15% for final six months of a proposed two-year period. Industry watchers say the cost of Indian solar energy could rise by up to 30%.

Tata Power Renewable Energy Ltd (TPREL), an arm of Tata Power, has won a contract to develop 250 MW (50 MW x 5) of solar projects in Tumkur district of Karnataka.

Chinese giant boasted 18% of the Indian market, to be crowned the nation’s top dog for the third consecutive year. Canadian Solar, First Solar, Hanwha Q Cells and JA Solar also enjoyed a big export market from the rising solar power.

Madhya Pradesh recently floated a tender for the implementation of grid connected rooftop solar PV projects under the RESCO (renewable energy service company) Model. Manu Srivastava, principal secretary and commissioner, New and Renewable Energy Department, Government of Madhya Pradesh, and managing director of Madhya Pradesh Urja Vikas Nigam (MPUVNL), speaks to pv magazine about the tender and initiatives taken by the state government.