Hyderabad: Centre's increased duty on solar power cells a bane

Hyderabad: The Centre’s proposal to impose a 70 per cent safeguard duty on imported solar cells and modules from China and Malaysia would affect its solar power production target and also burden discoms with a higher power cost.

The Centre’s proposal was on the basis of the request of national solar cell and module manufacturers seeking protection from low cost products from China and Malaysia which are major global suppliers.

The Centre has decided to install 100 gigawatts of solar power capacity by 2022. Plants rated for about 3 gigawatts are under construction and state discoms had signed agreements to purchase power from these plants at Rs 2.25 per unit. With the safeguard duty, the cost of ongoing plants would go up by about 25 per cent, which would lead to tariff increase.

According to CRISIL, the solar power projects under implementation, are worth over '12,000 crore, are at risk. In Telangana state, solar power capacity had reached about 3,600 MW. 

The cost of solar cells and modules was reduced and the estimated cost of power was brought down to '2.25 per unit.

But with the new duty the cost would go up to about Rs 4.50 per unit, according to solar power generators. Some ongoing solar plants had reached agreements with Chinese and Malaysian companies for supply of solar cells and modules. If they waited till availability of Indian-made solar cells and modules, projects would be delayed and the Centre would miss its target.

If the projects imported the cells and modules to complete the projects in time, power cost would go up creating financial burden on discoms.