Business Line ( 08 Feb )
carries following news report :
The government is weighing the option of
lowering the proposed 70-per cent safeguard duty on imported solar modules and
panels from China and Malaysia recommended by the Directorate-General of
Safeguards as power producers have complained that the move will significantly
increase generation costs and render some projects unviable.
The Standing Board on Safeguards, headed by the Commerce
Secretary, which is currently examining the proposal, is yet to make its
recommendation to the Finance Ministry as it is deliberating upon the
appropriateness of the high duty proposed by DG Safeguards, a government
official told BusinessLine.
“It is a tricky situation. While domestic manufacturers of solar
panels would definitely benefit from a steep safeguard duty, what can’t be
ignored is the debilitating effect it would have on power producers as it would
result in a steep increase in cost of production,” the official said.
The preliminary findings indicated that the domestic industry is
experiencing significant losses and increasing unsold inventory due to cheaper
imports, specifically from countries like China and Malaysia.
However, a high duty of 70 per cent on modules and panels from China
and Malaysia has the potential of putting at risk up to 3 gigawatt of solar
projects worth over ₹12,000
crore under implementation, said an analysis by rating agency
Crisil, published shortly after DG Safeguards came up with its proposal last
month.
“The safeguard duty proposed will also inflate project costs by 25 per cent and crank up viable tariff to ₹3.75
per unit from around ₹3
estimated earlier, making solar power less attractive to discoms. That would
also be more than the average power purchase cost of 10 out of 14 discoms last
fiscal,” the report said.
The US President Donald
Trump, too, imposed a 30 per cent duty on solar panels, which was less than
half of India’s recommended duties, the official said. “It is important for all
countries to promote solar power generation domestically, that is why Trump,
too, limited import duties on solar panels to 30 per cent,” he said.
I have no idea what is the current import duty on Solar
Cells / Modules / PV panels etc
But , in the larger interest of the entire national
economy ( - and not merely in the interest of domestic Solar industry ) , I
feel that duty ought to be “ Lowered “ – not increased !
Here is why :
·
INDIA
# Solar Power Capacity added during 2015-16 was
3 GW and during 2016-17 was 5 GW , taking our total installed capacity to 17 GW by Dec 2017
·
CHINA
# Had total installed Solar Capacity of 75 GW
in Nov 2016
# Added 52 GW between
Nov 2016 and Nov 2017 ( almost TEN TIMES of our addition )
# Total by Nov 2017 reached 126 GW ( - a jump of 67 % in one year )
For further justification
( in favour of lowering duty ) , read :
WhoseInterest ? [ 26 Jan 2018
]
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