Booster for ailing domestic solar industry

But solar manufacturers say customs, excise duty exemptions not enough to compete with China

 
By Ankur Paliwal
Last Updated: Saturday 04 July 2015

A solar module being made at Maharishi Solar Technology Limited in Noida (Photo: Meeta Ahlawat) Finance minister Arun Jaitley’s proposal of customs and excise duty exemptions on various raw materials used in renewable energy products has brought some relief to the ailing domestic industry, especially domestic solar industry, which has long been demanding these exemptions. Though the difference in product cost may not be much, but the industry has welcomed the move as it will help them get closer to level playing field with international players.

Putting the focus on domestic manufacturing, Jaitley said, “We need to maximise our utilisation of solar power. The existing duty structure incentivises imports rather than domestic manufacturing of solar photovoltaic cells and modules.” He proposed exemption of basic customs and excise duty on ethylene vinyl acetate (EVA) sheets and back sheets used in manufacturing solar panels and flat copper wires used for making photovoltaic ribbons. Similarly, solar tempered glass used in the manufacturing of solar photovoltaic cells and modules has been exempted from excise duty.

“It is definitely a welcome step,” said Bhupesh Trivedi, president (marketing) of Waaree Energies Ltd, which manufactures solar panels. “The domestic industry has been asking for these exemptions among other things to be able to compete with international players. China’s products are cheaper because of subsidies and exemptions given by the government to domestic industry. We also need support to become competitive,” said Trivedi. He, however, added that these exemptions will bring down the cost of panels by 2-3 per cent only as these raw materials do not make a major part of the panels. Agreeing with Trivedi, Pradeep Kheruka, vice chairperson of Gujarat Borosil Works Ltd, said, “Duty exemptions on solar tempered glass will bring down the product cost by about 3 to 4 per cent.” Overall, domestic solar industry expects the price of solar panels to reduce by 4 to 4.5 per cent.  

The domestic solar industry is awaiting imposition of anti-dumping duties by finance ministry on imported solar cells which make a major part of the panel. On May 22, this year, the commerce ministry recommended imposing anti-dumping duty of US $0.11 to US $0.81 per watt on solar cells imported from China, US, Taiwan and Malaysia. The duties are yet to be notified. “The government has taken the step in the right direction, if the duties also come through, we will get the long-awaited level playing field with international players,” said Trivedi.
 
Similarly for wind energy sector, Jaitley proposed to reduce the basic customs duty on forged steel rings used in the manufacture of bearings of wind operated electricity generators from 10 per cent to 5 per cent. Special additional duty of 4 per cent on parts and raw materials required for the manufacture of wind-operated generators has also been exempted.

In the electronics sector, domestic TV manufacturing sector has been given special attention. Jaitley proposed exemption on basic customs duty on colour picture tubes used to make cathode ray TVs, which are generally used by economically weaker sections who cannot afford to buy more expensive flat panel TVs. “The duty concession will help revive manufacturing of TVs in the Small and Medium Enterprise sector and create employment opportunities,” he said. At the same time, to encourage production of LCD and LED TVs below 19 inches in India, Jaitley proposed to reduce the basic customs duty on LCD and LED TV panels from 10 per cent to zero. Th exemptions are expected to reduce the price of flat screen TV by Rs 300-350, and that of cathode ray TV by Rs 150-300.

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  • Though the Budget provides

    Though the Budget provides some incentives to Solar Industry,here are the problems faced by the Solar Industry:
    Funding of initiatives like National Solar Mission is a constraint given India's inadequate financing capabilities. The finance ministry has explicitly raised concerns about funding an ambitious scheme like NSM.
    Manufacturers are mostly focused on export markets that buy Solar PV cells and modules at higher prices thereby increasing their profits. Many new suppliers have tie-ups with foreign players in Europe and United States thereby prioritizing export demand. This could result in reduced supplies for the fast-growing local market.
    The lack of closer industry-government cooperation for the technology to achieve scale.
    The need for focused, collaborative and goals driven R&D to help India attain technology leadership in PV.
    The need for a better financing infrastructure, models and arrangements to spur the PV industry and consumption of PV products.
    Training and development of human resources to drive industry growth and PV adoption
    The need for intra-industry cooperation in expanding the PV supply chain, in technical information sharing through conferences and workshops, in collaborating with BOS (balance of systems) manufacturers and in gathering and publishing accurate market data, trends and projections
    The need to build consumer awareness about the technology, its economics and right usage
    Complexity of subsidy structure & involvement of too many agencies like MNRE, IREDA, SNA, electricity board and electricity regulatory commission makes the development of solar PV projects difficult.
    Land allotment & PPA signing is a long procedure under the Generation Based Incentive scheme.
    Dr.A.Jagadeesh Nellore(AP),India

    Posted by: Anonymous | 6 years ago | Reply
  • Though the Budget provides

    Though the Budget provides some incentives to Solar Industry,here are the problems faced by the Solar Industry:
    Funding of initiatives like National Solar Mission is a constraint given India's inadequate financing capabilities. The finance ministry has explicitly raised concerns about funding an ambitious scheme like NSM.
    Manufacturers are mostly focused on export markets that buy Solar PV cells and modules at higher prices thereby increasing their profits. Many new suppliers have tie-ups with foreign players in Europe and United States thereby prioritizing export demand. This could result in reduced supplies for the fast-growing local market.
    The lack of closer industry-government cooperation for the technology to achieve scale.
    The need for focused, collaborative and goals driven R&D to help India attain technology leadership in PV.
    The need for a better financing infrastructure, models and arrangements to spur the PV industry and consumption of PV products.
    Training and development of human resources to drive industry growth and PV adoption
    The need for intra-industry cooperation in expanding the PV supply chain, in technical information sharing through conferences and workshops, in collaborating with BOS (balance of systems) manufacturers and in gathering and publishing accurate market data, trends and projections
    The need to build consumer awareness about the technology, its economics and right usage
    Complexity of subsidy structure & involvement of too many agencies like MNRE, IREDA, SNA, electricity board and electricity regulatory commission makes the development of solar PV projects difficult.
    Land allotment & PPA signing is a long procedure under the Generation Based Incentive scheme.
    Dr.A.Jagadeesh Nellore(AP),India

    Posted by: Anonymous | 6 years ago | Reply
  • This is o.k. but who is going

    This is o.k. but who is going to control the quality of the equipment supplied by the businessmen. Rooftop activities are affected by this -- solar panels --. Individuals who get the work done by the middlemen knew little on the subject. He realizes only when the expected power is not received to meet the expected demand. Panels with defective surfaces are also sold.

    There must be some institutional mechanism to control quality of solar equipment.

    Dr. S. Jeevananda Reddy

    Posted by: Anonymous | 6 years ago | Reply