Chinese solar panels to face quality control barrier

 The Centre is looking to restrict the influx of low-quality, cheap solar panels, a major component in the industry that is experiencing a fall in tariffs, from China. The government is designing standards for solar panels, which would also help it identify domestic and overseas suppliers. "We are looking at tighter quality control so that we get good quality equipments for our solar programme. There will be a process to maintain tighter standards to maintain efficiency," said a senior government official.

The government had recently reduced incentives to indigenous solar equipment manufacturers, after the World Trade Organization (WTO) rules mandated not giving preferential treatment to the domestic solar industry. New Delhi has been weighing options after it lost twice at the WTO, following US claims that domestic sourcing in the National Solar Mission is an anti-trade practice.

Among other measures are subsidies for manufacturers and imposing anti-dumping duty. "The matter is being discussed," said another government official. "The idea is to match the prices of similar (Chinese) technology and the difference can be imposed as dumping duty on Chinese panels. It is at a very primary level." The Prime Minister's Office is also looking into the matter, said sources.

Anti-dumping cases by Indian solar manufacturers against imports from China have failed twice. Once it was rejected by the finance ministry and another was when Power Minister Piyush Goyal had urged the industry to withdraw the case.

Currently, 10 per cent capacity in each tender issued by the Centre for a solar power project is kept for domestic content sourcing. It was 50 per cent but was brought down after the US made an appeal in the WTO in 2014. Apart from this, major public sector undertakings such as NTPC and Coal India have committed to build solar power generation capacities using domestic content.

About Rs 85,000 crore worth of investments in the country have been lying dormant due to the influx from China. This created a loss-making industry, said a PwC analysis.

According to industry calculations, Indian solar panels are costlier by 25-30 per cent compared to the ones manufactured abroad. "The Chinese equipment manufacturers have access to cheap credit ranging from 2-6 per cent annually, whereas Indian manufacturers pay up to 13 per cent on loans. There is no level-playing field in the sector," said a Delhi-based analyst.

Cheap Chinese panels have been making their way into India since the beginning of the National Solar Mission in 2010. Price of panels have crashed to 32 cents a kWh from 50 cents a kWh in three years, owing to global overcapacity and almost dumping by China, as alleged by domestic panel makers.

Currently, the installed capacity of Indian solar cell manufacturing is around 1,386 Mw and module is close to 2,500 Mw. Less than 20 per cent of the manufacturing capacity is operational due to low demand. Of the solar power generating capacity, about 75 per cent is built on cells imported from China, 15 per cent from the US and the remaining is from domestic manufacturers. India's solar power installed capacity is 12,000 Mw.