India demands proof of unlawful domestic allowance

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India has demanded the US justify its domestic content allowance for renewable energy products which it believes breaks global trade rules.

According to Reuters, the complaint cited Michigan's renewable energy legislation, Los Angeles' solar incentive programme, California's self generation programme and incentives for commercial and residential solar power offered by Austin Energy in Texas.

California has also been singled out by the Chinese government claiming its domestic content allowance is discriminatory against foreign companies launched in 2011. China also cited Washington, Massachusetts, Ohio and New Jersey.

Unlike their US and Chinese peers, Indian manufacturers have specified that their main concern is that US manufacturers in particular are using a loop hole in India’s domestic content allowance to operate in the country. The domestic content allowance applies only to crystalline PV and not thin-film.

Stefan de Haan, principal photovoltaic analyst at IHS iSuppli, maintains the widely accepted idea that, “The underlying reason is that they [US manufacturers] can get around the local content criteria using thin-film. That's why the American CdTe producers First Solar and Abound Solar are very successful there.”

As a result of calls from its domestic industry, in March it was announced the Indian government is considering postponing bids for the second phase of the Jawaharlal Nehru National Solar Mission (JNNSM) to the end of April or beginning of May.

The Economic Times states Indian manufacturers believe authorities are not doing enough to support its domestic industry which it claims in “on the verge of shutdown”. The publication states the industry is operating at only 10% of its capacity, blaming “cheap imports from abroad”.

Also on Wednesday, prime minister Manmohan Singh told delegates at the Fourth Clean Energy Ministerial meeting in Delhi that India can double its renewable energy capacity to 55,000MW by 2017 urging foreign companies to set up facilities in India to boost its installed capacity.

“We are also taking steps to exploit non-conventional clean energy sources such as solar and wind power, and also energy from the bio mass. It is proposed to double the renewable energy capacity in our country from 25,000MW in 2012 to 55,000MW by the year 2017,” he said.

Hari Manoharan from Indian consulting firm RESolve believes this goal is realistic: “With the way the national solar mission has been structured and the fact that there are numerous state solar policies coming up, I think it would definitely be possible to double the solar capacity from the current 1.4GW.

“Andhra Pradesh alone is targeting 1GW of installations from the current round of auctions. Tamil Nadu is expecting to add about 220MW over the course of the year. So yes, doubling solar capacity from the current numbers should definitely be possible in the next four years.”

Figures from the Indian Ministry of New and Renewable Energy state the country has already achieved a total a cumulative capacity of 1,447MW for grid-connected solar PV.

Prime minister Singh said: “India is potentially a large market for production of such [solar] equipment and it is also a potentially competitive, attractive production base for supplying other countries.”

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