MNRE announced it’s proposal to impose BCD on solar cells and modules without grandfathering of bid-out projects. Government plans to impose an enhanced Basic Customs Duty (BCD) of 25 per cent and 40 per cent on imported solar cells and modules, respectively.
The move will boost the Aatmanirbhar Bharat vision as such heavy duties may significantly slow down the growth of solar energy uptake in India and will push up the costs predicts the experts
“The Union Government’s announcement on imposition of Basic Customs Duty on imported solar cells and modules will provide a level playing field to domestic manufacturers and give a big boost to the Prime Minister’s vision of an Aatmanirbhar Bharat. The implementation date of April 2022 ensures that already contracted bids are not impacted and renewable energy players can factor in the new cost of solar cells and modules in the upcoming bids. “
Sumant Sinha, CMD, ReNew Power
“This move will slow down the race towards the 175 GW target by 2022 i.e. next year. Although this removes considerable uncertainty but the rates are too high and will increase the cost of solar power for discoms and consumers alike. This will increase the cost of manufacturing power as well as other industries in India. We understand that the intent of the government is positive and they want to encourage domestic manufacturing but the method should have been different. The government should have provided direct manufacturing subsidies to manufacturers to help them scale up their capacities and this would have been beneficial to the sector.”
Pinaki Bhattacharyya, CEO & MD Amp Energy India
The imposition of basic custom duty of 40 per cent on solar modules and 20 per cent on solar cells will push up the costs, leading to higher tariffs and reduction in capacity additions in the short term, but the decision will help in achieving the objective of “Aatmanirbhar Bharat” from a long-term perspective. The government should follow up this move by encouraging the domestic solar module industry to scale up manufacturing and by announcing incentives to promote R&D of increasingly
cost-effective technologies. The resultant economies of scale will not only reduce India’s dependence on cheap imports from China and Malaysia in due course, it will also enable the country to emerge as a major exporter of solar modules and cells in years to come. We cannot afford to ignore the fact that overdependence on imports might cause disruptions in supply, as witnessed globally in the aftermath of the Covid-19 pandemic.
Simarpreet Singh, Founder-Director, Hartek Solar
“High import duties will certainly lead to a significant increase in the cost of generation across all solar segments. Import barriers can only be temporary measures. Eventually, Indian manufacturing will succeed only if we are able to compete in the global marketplace – in terms of price, technology, and scale”.
Ritu Lal, Senior VP & Head – Institutional Relations, Amplus Solar