Several environmental organisations have sent a letter to the US trade representative urging the US to drop its trade case against India and instead to support the country’s domestic solar industry.
In February, the US government filed a complaint with the WTO claiming the domestic content requirement (DCR) in India's national solar programme was “discriminatory”. The US complaint was a result of India’s anti-dumping (ADD) investigations against China, Malaysia, Taiwan as well as the US.
Campaign group the Sierra Club, on behalf of 11 other US organisations, wrote in the letter to Ambassador Demetrios Marantis, acting US Trade Representative: “Domestic content rules have been a vital policy tool used to foster, nurture, and grow new industries throughout history and can be used today to build and support renewable energy industries.”
The letter states that India’s DCR could play an important role in reducing poverty in the country by diversifying the country’s energy mix, creating jobs and new investment opportunities.
“While it is critical to support and build a US solar industry, the development of our solar industry should not come at the expense of India’s ability to develop its solar industry,” said the letter.
Hari Manoharan, consultant at Indian firm RESolve Energy told PV-Tech: “If DCR and ADD are imposed, most module manufacturers in the country may not be able to meet the growing demand because they have either shut down their options or greatly reduced their production capacity to deal with the lack of demand.”
Manoharan warned that if India’s anti-dumping complaint against the US comes to fruition this would cause more damage to the US solar industry than the inclusion of the DCR in the Jawaharlal Nehru National Solar Mission (JNNSM).
He also pointed out that it is important to note the DCR is a policy limited to the JNNSM and does not apply to any state policies.
“Capacity additions in the future are going to be primarily driven by state policies such as the Andhra Pradesh, Rajasthan, and Tamil Nadu etc. It is worth noting that these policies are not small, they have large capacity addition targets as seen in the case of tenders issued by Andhra Pradesh and Tamil Nadu for 1000MW each.
“If USA vehemently opposes DCR, then the only option to dissuade developers from going for imported modules would be duty imposition which puts USA on the back seat.”
Sierra Club trade representative Ilana Solomon admonished the US’ strategy: “The United States shouldn’t be bullying other nations for nurturing their domestic economic growth, especially in an industry that could address the devastating effects of climate disruption worldwide.”
Furthermore, it is argued in the letter that: “Finally, and most important, the ability of India to grow a domestic solar industry is critical to global efforts to tackle climate change. Our global climate will remain in danger if only some countries develop renewable energy industries while others continue to rely on fossil fuels. In order to avoid catastrophic climate impacts, all countries must urgently be investing in renewable energy technologies.”
Solomon added: “We're teetering on the edge of a climate tipping point, and we must invest in clean energy now – not only in the US, but globally. Instead of attempting to thwart India’s solar innovation, the Office of the United States Trade Representative should support India's efforts to develop a domestic solar industry, just as we must do at home.”
However, it has been reported by local media that the Indian government is now considering expanding its anti-dumping complaint to include thin film, whereas originally it was purely crystalline silicon modules.
Vineet Arya head of marketing and communications at Tata Power Solar, one of the companies that brought the initial complaint to the Indian Ministry of Commerce, told PV-Tech: “From our side obviously we are excited to get this support from unexpected quarters.”
The other members in the Indian complaint include, Indosolar, Jupiter Solar Power and Websol Energy Systems, Moser Baer, Tata Power Solar, Lanco, Alpex Solar, Solar Semiconductor, Borosil, Emmvee, Vikram Solar, Waaree, Ajit Solar, Photonix, Modern Solar, HHV, Toposon, Evergreen, Euro Multivision, Goldy Green and Green Brillance.
Despite all this negativity, business consulting firm Frost & Sullivan estimated earlier this month that the Indian solar market will be worth US$2.05 billion in 2013, up from US$1.05 billion last year.
The US and India will begin a process to find a resolution to this challenge. If no resolution is reached, the US can then request the establishment of a WTO panel to determine whether India has violated trade rules.
The organisations are 350.org, ActionAid USA, Center for Biological Diversity, Center for Food Safety, Center for International Environmental Law, Earth Day Network, EcoEquity, Friends of the Earth US, Global Exchange, Greenpeace USA, Institute for Policy Studies, Global Economy Project and Sierra Club.