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India’s ruining its grand plans to become a solar powerhouse

India’s ruining its grand plans to become a solar powerhouse

MUMBAI: The Indian government is undermining its own grand plans for the country’s solar power sector. India’s directorate general of safeguards (DGS), part of the ministry of finance, has proposed a 70% safeguard duty imposed during import surges on imported solar cells and modules in order to protect the local industry. These are likely to jack up costs and add to the pressure on solar power projects, thwarting prime minister Narendra Modi’s plan to install 100 gigawatts of capacity by 2022. This setback comes just as the sector is bouncing back on to the growth track after battling a difficult year. Besides, the government is also expected to introduce anti-dumping duties this year, an investigation for which is currently underway. Anti-dumping duties, unlike safeguard duties, are imposed when foreign players indulge in predatory pricing. In August 2017, the ministry also introduced new norms for procuring solar power from farms set up through auctions. These norms made the process more transparent and prevented the unilateral termination of power purchase agreements. It is as a result of these new norms that there has been a spurt in auctions, Ankur Agarwal, a senior analyst with India Ratings and Research who tracks the infrastructure sector, told Quartz. With some clarity brought into policy, 10 GW capacity addition per year is easily achievable over the next two or three years, in line with the target of completing 60 GW of grid-connected solar power by 2022, Agarwal added. As of Dec. 15, 2017, India had an installed capacity of 16.68 GW, and solar farms of another 6.5 GW were under construction, renewable energy minister RK Singh told parliament on Jan. 04. Developers, however, must still deal with one major issue: the proposed introduction of anti-dumping duties on imported solar panels a few months from now, which might slam the brakes on growth.