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India's solar financing may have peaked for now at $10 billion in 2017: consultancy

Reuters  |  NEW DELHI 

By Krishna N. Das

(Reuters) - India's solar industry more than doubled its fund raising to $10 billion in 2017, consultancy said, but activity is likely to slow this year as plans to slap high tariffs on imports.

has set a target of raising India's solar power generation to 100 gigawatt (GW) by 2022, five times current levels. The government says will need to raise at least $125 billion to reach its goal of generating 175 GW of from all renewable sources in five years.

New large-scale and rooftop solar installations in jumped to 9.63 GW last year, compared with the addition of 4.31 GW in 2016, said, but predicted additional installations will fall by 22 percent to 7.5 GW this year.

"The lower forecast reflects a smaller pipeline of projects scheduled for commissioning in 2018," said. "Auction activity was not very robust in 2017 and though there was a surge in activity at the end of the year, most of the projects that were tendered are not likely to be commissioned until 2019."

called a proposal by India's safety watchdog to impose a 70 percent duty on imports of from and some other countries, to protect domestic manufacturers, as an "unexpected and aggressive recommendation that has brought the industry to a standstill".

Any duty would hurt big project developers in such as SoftBank-backed but would be good for local solar component makers such as and Moser Baer, which have struggled to compete with Chinese companies such as and

also reported in January that solar modules worth more than $150 million were stuck at various Indian ports due to a dispute over their classification and the import tax applicable to them.

Most of the modules come from China, but several consignments were held up because customs officials demanded that some of them be classified as electric motors and generators, attracting a 7.5 percent duty, not as diodes, transistors and similar with no duty.

aims for to make up 40 percent of installed power capacity by 2030, compared with 18.2 percent at the end of 2017, and the ministry of new and said in January it was looking to address issues facing solar companies.

"The imposition of any additional duties would make solar more expensive and potentially scare away financially strapped distribution companies who are looking to procure the cheapest power generation source available," said.

(Reporting by Krishna N. Das; Editing by Susan Fenton)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, March 13 2018. 17:10 IST