Solar capacity in India may reach its 100GW by 2022 target despite slowdowns over protectionist duties

RENEWABLES: Govt. drops 7.5% solar import duty, India’s ‘solar slowdown’ amid ‘unprecedented’ global growth, UN blames duty, GST for India’s solar drop, ‘You will pay’ cost of duty hikes, not developers

Customs duty on solar imports dropped

India has removed the 7.5% customs duty from solar imports, six months after it implemented the controversial tax. The government dropped the 2016 classification of solar modules as “electrical motors and generators”, which attracts 7.5% duty, and restored the earlier classification of “photosensitive semiconductor devices,” whose import is free.


Last year, over 1,000 containers of solar equipment were stuck at Chennai port as developers refused to pay the duty. Meanwhile, the uncertainty still looms over the proposed 75% safeguard duty. India imports 90% of its solar modules.

Duty hikes: ‘Customers will pay’

Centre has allowed developers to pass on the costs of any increase in duty on imported solar equipment to discoms. Which actually means any hike will be borne by the customers. But, will the new norms end the uncertainty over impact of possible safeguard duties on imported equipment? Government is checking the veracity of data submitted by domestic solar industry for implementation of safeguards duty.

UN blames India GST, import duty

UN report blames duty on Chinese solar equipment and Centre’s Goods and Services Tax (GST) for India’s falling solar capacity additions in 2017 _ the year when India, China, Brazil pledged $177 billion to renewables, up 20%, compared to $103 billion from rich countries, down 19%. India ranked fourth in the world for renewable investment last year, at $10.9 billion, down 20%.

‘Solar faces 40% drop’, minister expects to beat 100GW target

Therefore, India’s solar capacity addition may nosedive by 40% to 4GW in the current financial year, thanks to solar slowdown over taxes and duties, ratings agency ICRA said. India added 7.2GW solar between April 2017 and February 2018, and 7-7.5GW is expected in FY18 in the grid-connected solar, which may “fall to 4-4.5GW in FY19.” But, science and technology minister remains optimist insisting that meeting 100GW solar target before 2022 deadline “will not be a problem”.

2017: ‘unprecedented’ global solar growth

But globally, solar power grew to “unprecedented levels in 2017”. A recent study concluded that clean energy makes climate, as well as economic sense. Around 98GW of new solar capacity worth $160.8 billion were installed globally in 2017 (up 18% from 2016), far exceeding fossil fuels and nuclear.

The UN Environment chief said “Investments in renewables deliver more jobs, better paid jobs, less pollution, healthier development.” China spent a record $126.6 billion, up 31% from 2016. Power generated by renewables avoided about 1.8 gigatons of CO2 emissions, “equivalent to emissions of entire U.S. transport system”.

2019 to be ‘high volume’ wind energy market

2019 will begin the “high volume” wind power installations with several auctions in the offing. Wind turbine major Suzlon expects “exponential growth of 10-12GW wind power each year”. India is targeting 23GW wind power by March 2020. Centre aims to achieve 100GW in solar and 60GW in wind projects by 2022.

Wind capacity “sharply reduced”

The more transparent auction route “sharply reduced wind capacity” addition in 2017-18. Against a target of 4,500MW, only 1,739.14 MW was added, far less than the 5,400 MW added in 2016-17. India’s total wind capacity stood at 32,916 MW at the end of March 2018, up from 31,177 MW a year ago.

China backs small wind farms

China, meanwhile, is backing small wind farms also called distributed wind power projects with grid connectivity. Distributed wind power farms can be used to power energy generators and transmit to the grid.

Solar rooftop makers yet to get Centre’s Rs 200 crore subsidy

Gujarat’s solar rooftop manufacturers are in the midst of a subsidy crisis, as over 100 manufacturers say the state and Centre have not reimbursed benefits since September last year. The total reimbursements have hit Rs200. The state government provides Rs 10,000 subsidy per kilowatt for maximum 2 kilowatt while centre gives Rs 20,700 per kilowatt.

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