Solar analyst Bridge to India’s managing director, Tobias Engelmeier, has warned anti-dumping duties will halt India’s solar industry for up to two years.
India published definitive anti-dumping duties on the US, Chinese and Malaysian solar manufacturers on 23 May.
Currently 80% of modules used in India are foreign imports, according to Bridge to India.
In a blog post, Engelmeier estimates the “ill-conceived” and “ill-timed” anti-dumping duties will increase the cost of solar by up to 70 paisa per kWh (less than US$0.01), with 1GW of existing projects subsequently scrapped.
The duties will raise prices by 10%, meaning just for the 7.5GW of government-backed projects planned by 2017, it would now cost bill payers and taxpayers US$600 million, Bridge to India estimates.
Most worryingly Engelmeier said the duties would shake investor confidence, setting the market back by as much as two years.
Although some domestic manufacturers may benefit, all of the solar industry is predicted to suffer long term, said Engelmeier.
Engelmeier claimed the anti dumping regulations are a hangover from the previous Congress government.
Prior to the elections, analyst RESolve told PV Tech the Congress government was possibly playing politics with the duties, in order not to appear ‘weak’ in the election run up.
The duties are now dashing hopes that have been raised by the newly elected Bharatiya Janata Party (or Indian people’s BJP party), led by Narendra Modi, former chief minister of the leading solar state, Gujarat.
The duties have hit China hardest, with a US$0.81/W duty.
US thin-film producers will face US$0.11/W, and US silicon-based panels will be subject to US$0.48/W duties.
Malaysian manufacturers will face duties of US$0.62/W and Taiwanese firms US$0.59/W. The tariffs are currently only recommendations from the Ministry of Commerce.
As cell import duties will affect domestic solar module manufacturers, as well as exposing domestic cell manufacturers to a loss in demand and international trade retaliation, the dumping duties will not benefit anyone long term, argues Engelmeier.
He proposed instead that solar is made cheaper, using mechanisms such as extending cheap loans to domestic manufacturers, as well as other long-term support measures, such as transparent policies, investment in job skills training and in research and development.
Project developers, including Welspun and several industry analysts, have warned that anti-dumping duties would pose a serious threat to the industry’s future. US thin-film manufacturer, First Solar said the duties could threaten new project developments earlier this week.