The Ministry of Commerce has recommended anti-dumping duties (ADD) for solar cells and modules from the leading supplier countries. The final decision on their imposition is now awaited. Since then, the solar market in India has come to a standstill, with many projects and policies on hold. For more details, please download the latest edition of the India Solar Compass (July 2014) here.
- The imposition of ADD could lead to a reduction of solar installations by almost 67% in the next year
- Even if ADD is not enforced, installation capacity in the next year is still expected to fall by almost 40% due to delays caused by uncertainty about ADD
- Projects under state policies and parity based projects will be affected most severely
As a result of the ADD, the cost of solar power could rise by about 10%, making many solar projects unviable. Also, making solar power more expensive to the taxpayer or power consumer. Indian module manufacturers who do not have their own cell manufacturing, will find it almost impossible to sell in the Indian market. Given the limited capacities of domestic cell manufacturers, the market will face bottlenecks for at least two years.
Had ADD not been tabled, we expect that India would have added over 1.6 GW of solar capacity over the next year. Even if ADD are not enforced, India will likely add almost 40% lesser solar (delays due to uncertainty). If ADD are imposed, the market will fall back to the growth level of pre 2011 and many players and investors might exit.
Figure 1: Projected solar capacity addition in the next year
Vinay Rustagi is the Managing Director at BRIDGE TO INDIA.