Raising concerns over plans to impose import levy on solar cells, the ministry of new and renewable energy has said that such a decision could result in higher electricity prices and push many projects into litigation. Instead of hiking the duty, the ministry is of the view that reservation for local content could be increased in the tenders to provide relief for the domestic equipment makers.
To protect the struggling domestic industry, the ministry of commerce and industry, in May, had recommended imposing a restrictive duty in the range of $0.11 to $0.81 per watt on solar cells imported from the US, China, Malaysia and Chinese Taipei.
"We are opposing it because this (proposed) anti-dumping duty is only against four countries. This measure will push up the price of power and state governments are also opposing this because they want to buy cheap power," Tarun Kapoor, joint secretary at MNRE, said.
According to him, all tenders which have already been awarded might go into litigation as they would not deliver in case higher anti-dumping duty comes.
"People, who have bid at a competitive price for solar panels, will get an excuse to default by saying that anti-dumping duty has upset their cost calculation. So they will all go into arbitration."
Almost 3,000 MW projects, which is in the pipeline, are likely to get affected by this decision, Mr Kapoor noted.
The higher duty proposal also comes at a time when MNRE is working on ways to bolster renewable energy in the country, including from solar sources.
"We are not supporting anti-dumping duty. We favour a domestic reservation policy, which is the best method to support local companies," he said.
Source- Asian Age