The Union budget has tried to boost domestic production by increasing import duties on finished products like PV inverters and solar lanterns.
Imported components and structures of solar projects are also getting more expensive, but the price of the raw materials from which they are made, such as B. coated steel for the assembly of structures, will help with an eight month suspension of anti-dumping duties.
Presentation of the budget 2021-22, Treasury Secretary Nirmala Sitharaman said tariffs on solar inverters and lanterns, currently at 5%, would rise to 20% and 15% respectively from Feb. 2 to level the playing field for Indian manufacturers.
The dominance of imported inverters on the market was proven by an analyst estimate Bridge To India, which suggested nearly 80% of the Indian rooftop solar panels added from July 2019 to the end of June, contained Chinese products.
The anti-dumping duties are levied on the Chinese, Vietnamese and Koreans Flat rolled steel products clad or coated with an aluminum or zinc alloy will be suspended from today until September 30th. The anti-dumping duty legislation provides that such fees may be temporarily suspended for a maximum of 12 months and the government has not given a reason to open an eight month window other than a desire to expedite the deployment of solar projects.
The Indian rating agency Care Ratings has estimated that 30 tons are required for assembly structures Aluminum and galvanized flat steel for every megawatt of project generation capacity.
While developers may benefit from a temporary decrease in the cost of such raw materials for solar projects, the price of the type of components they are made from will rise, at least for imports, with the budget pulling back the basic duty exemption for all Machines, including prime movers, instruments, devices, components, or ancillary equipment used in the construction of solar projects.
The basic duty exemption granted is not mentioned However, solar panels and cells are getting closer with the 2022 deadline for 100 GW solar to be set up across the country.
Sitharaman highlighted the government's plan to incentivize higher quality solar manufacturing, stating: “Solar energy holds great promise for India. To build domestic capacity, we will announce a step-by-step solar cell and solar module manufacturing plan. "
The Finance Minister also announced a five-year fund of INR 3.05.984 billion to help financially crippled power distribution companies. The money will be available for infrastructure projects such as the introduction of prepaid smart meters, the separation of feeders and system upgrades and will be tied to improved financial performance.
However, this handout was offset by the Minister's plans to remove the monopoly of the public and private utilities. According to the minister, a framework is to be developed to offer electricity users a choice of energy supply companies.
There was a success in energy storage: lithium-ion battery parts – with the exception of those used for assembling cells or protective boards – are to be subject to a 2.5% tariff from April.
Sitharaman also confirmed plans for a green hydrogen strategy, saying: “During his speech at the third Re-Invest conference in November 2020, Prime Minister (Narendra Modi) announced plans to launch a comprehensive national hydrogen energy mission. It is now proposed to start a hydrogen energy emission to generate hydrogen from green electricity sources in 2021-22. "
The Indian Solar Energy Corporation (SECI) and the Indian Renewable Energy Agency (IREDA) have increased budgets by INR 1,000 billion and INR 1,500 billion, respectively.
reaction
The budget was praised by solar manufacturers and developers alike for the announcements of the increase in import tariffs for solar inverters, capital increases for SECI and IREDA, hydrogen energy emission and reforms of the energy sector.
However, the PV manufacturers were disappointed with the lack of tariffs on imported solar panels and asked for more details on how the government's plan to encourage higher quality solar production would work.
Bharat Bhut, co-founder and director of module maker Goldi Solar, welcomed the increase in tariffs on imported solar inverters and lanterns, but said the industry has been demanding tariffs on imported modules since the last budget was announced. The lack of tariffs in connection with the planned completion of import duties on imports in July would put Indian solar manufacturers at a severe disadvantage, Bhut said.
Regarding the state incentive system for solar production, he said: “An additional allocation under the PLI system (Phased Linked Incentive) was mentioned temporarily. While there is still no clarity on what the program entails, we hope that this opens up some possibilities for local actors and the ecosystem (solar manufacturing). "
Chiranjeev Saluja, managing director of the solar cell and module manufacturer Premier Energies, sees the withdrawal of the duty exemption for imported solar project machines as a declining step. "If the exemption is actually withdrawn, equipment costs can increase, discouraging new investments in solar," he said. "It will also drive up project implementation costs, which will affect the bottom line of companies involved in solar manufacturing."
Gyanesh Chaudhary, managing director of Vikram Solar, said India's renewable energy industry, especially solar, appreciates the efforts of the Indian government to help keep electricity clean, especially during the pandemic, but is hoping for more differentiated support from the recent budget. Among the missed opportunities, the MD cited a possible exemption for manufacturers from customs duties in special economic zones. 5% interest subsidy for term loans and working capital; central financial support of 30% in advance for investments; an increase in export incentives from 2% to 8% as part of the waiver of duties or taxes on export products; a "super deduction" for R&D spending and access to a national clean energy fund.
"As a domestic solar manufacturer, we are grateful for the government's focus on supporting the growth of solar manufacturing in India and we hope that the new phased solar cell and module manufacturing plan (continues) embodies the intent," said Chaudhary.
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