The Ministry of Finance approved imposing a 40% BCD on Solar Modules & 25% BCD on Solar Cells (without grandfathering of bid-out projects) with effect from 1st April 2022. The announcement also mentioned “In view of above, the undersigned is directed to inform all RE implementing agencies and other stakeholders, to take note of above trajectory and to include provisions in their bid documents, so that bidders take the trajectory into account while quoting tariffs, in all bids where the last date of bid submission is subsequent to this GM. In all such bids, the imposition of BCD as per above trajectory shall not be considered as change- in-law.“
Industry experts gave mixed reactions. Here’s a small collection of thoughts from social media paltforms:
“India has unquestionable domestic demand for solar panels that will exist for decades, PLI scheme can make Indian solar panels globally competitive in the short term.
New generation solar panels (500W+), have just come on the scene and investment in new lines will have a service life of at least 3-4 years (long by solar standards).
Investors should not hide behind duties to make sub-standard solar panels. Planning must be done for at least a 5-10 GW line to have any chance of succeeding. India should invest in R&D, partner with global technology companies, where required, to upgrade technology with the rest of the world.
Also don’t overrule global overcapacity in panel manufacturing and shortage of raw material as China will add enormous new manufacturing capacity in 2021. India is projected to add solar panel manufacturing capacity upto 20 GW in 18 months. Government should announce a drawdown of these duties after 6-7 years for long term benefits.”
Jasmeet Khurana, Manager, Mobility – World Business Council for Sustainable Development
“Overall, a boost to the manufacturing segment. However, duration of BCD is not defined that makes it difficult for new facilities to evaluate profitability. Further, respite is yet not provided for units located in SEZ and bulk of available capacity in India is located in SEZ at this point of time. All future bids will have to consider duties while bidding. This leaves not only the cost but also the availability conundrum to be solved. Sweet spot for PV module import is from Aug-21 to Mar-22 as SGD will lapse (unless extended) and BCD won’t be there.”
Mudit Jain, Head Research, Tata Cleantech
With all the existing overcapacity globally and more coming up in China Indian Solar PV ecosystem would have done better with possibly a longer duty based protection and possible enablers like Solar equipment parks (esp for cells, wafers and ingots).
Amit Srivastava, Assistant General Manager (Project Appraisal), Bank of India
There are few big manufacturers in this space. When we talk about localising manufacturing we discuss an integrated facility focused on Mono’s and pretty much obliterated the poly segment. We should look at cell production. We should invite international players to set up their facilities and give their expertise. The government should balance the needs of pushing domestic manufacturing vis-a-vis the availability of cheaper solar energy for the country.
Prem Bajaj, Climate Change Advisory & Solutions
Great initiative by MNRE for the PV Module manufacturing segment. But no clarity on duration is a challenge for new lines.
Hemant Sapra, Head Solar Products Development, Design & Sales Support at Jakson Engineers Limited
