Scatec puts Indian PV project on hold due to ‘lack of domestic module supply’, import duty

Facebook
Twitter
LinkedIn
Reddit
Email
Scatec’s 40MW Mocuba solar project in Mozambique. Image: Scatec.

Norwegian independent power producer (IPP) Scatec said it has put on hold a 900MW solar project in India due to a lack of supply of domestic modules and the upcoming introduction of a new import duty.

Having announced a partnership with Indian solar developer ACME last year to realise the PV plant in the state of Rajasthan, Scatec has now moved the project from backlog to pipeline, citing both India’s 40% basic customs duty (BCD) on modules, which is due to come into effect this April, and “limited domestic capacity”.

This article requires Premium SubscriptionBasic (FREE) Subscription

Unlock unlimited access for 12 whole months of distinctive global analysis

Photovoltaics International is now included.

  • Regular insight and analysis of the industry’s biggest developments
  • In-depth interviews with the industry’s leading figures
  • Unlimited digital access to the PV Tech Power journal catalogue
  • Unlimited digital access to the Photovoltaics International journal catalogue
  • Access to more than 1,000 technical papers
  • Discounts on Solar Media’s portfolio of events, in-person and virtual

Or continue reading this article for free

Scatec CEO Raymond Carlsen said that although there will be a change in India’s market from modules being imported from China to being sourced locally, the company is uncertain about how quickly that is moving.

“There is a gap in between the price level that we have seen from China and the expected price level in India for modules,” Carlsen said during a conference call with investors following publication of the company’s 2021 financial results.

“We expect that over time, the Indian production lines for modules will approach the same cost level as what you have in China.”

Alongside the 40% tariff on modules, India will also introduce a 25% BCD on solar cells from 1 April as part of government ambitions to make the country’s solar sector less dependent on imports.

Last year India imported more than 80% of its solar cells (unassembled) from China, according to consultancy Fitch Solutions, which said in a recent report that while the new duties represent a positive step to spur domestic manufacturing in India, the market “might not be ready for such an aggressive push yet”.

Scatec’s 900MW plant – in which the IPP and ACME each hold a 50% stake in – has a US$400 million capex and is backed by a 20-year power purchase agreement with Solar Energy Corporation of India (SECI).

Although construction on the installation had due to begin last year, Carlsen said it will now be part of the company’s pipeline “for the time being”.

Boosted by its acquisition of hydropower developer SN Power, Scatec’s revenues in 2021 jumped 62% year-on-year to NOK4.62 billion (US$525 million), while EBITDA more than doubled to NOK2.69 billion (US$305 million).

The company’s backlog of projects totals more than 2GW –  including solar plants in markets such as Brazil, South Africa and Tunisia – all of which are expected to begin construction this year.

Conference call transcript from Seeking Alpha.

Read Next

May 29, 2024
The challenges facing Europe's solar sector are explored in depth in the latest edition of our quarterly journal, PV Tech Power.
May 28, 2024
The European Council has adopted the EU’s Net-Zero Industry Act as the EU looks to bolster its clean energy manufacturing industries.
May 24, 2024
Waaree Energies has signed an agreement to supply 445MW of modules to Statkraft India for a project in Bikaner, Rajasthan.
May 24, 2024
Indian solar installations increased by over 400% in the first quarter of 2024 to the highest quarterly deployment levels in its history.
Premium
May 24, 2024
Quarterly reports from China’s big-five PV module producers highlight the challenges PV manufacturers face in maintaining profitability.
May 22, 2024
The European Solar Manufacturing Council (ESMC) has called on increasing work around inverters’ cyber- and data security.

Subscribe to Newsletter

Upcoming Events

Upcoming Webinars
May 29, 2024
11am (EDT) / 5pm (CEST)
Solar Media Events
June 4, 2024
London, UK
Upcoming Webinars
June 11, 2024
3:00 PM (BST) / 4:00 PM (CEST)
Solar Media Events
July 2, 2024
Athens, Greece