Safeguard Duty on
Solar Cells ?
====================
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 :
Whose
Interest ? [ 26 Jan
2018 ]
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