China ban may jack up solar projects cost

The increase in the cost of rooftop plants would be much higher than the megawatt scale solar plants, they felt.

 Chinese firms supply about 80 per cent of solar cells and modules to India. The Union Ministry of Power has proposed to increase the customs duty on solar module imports to 20-25 per cent for the current year and up to 40 per cent in the next fiscal.

 “At present, a one-kilowatt grid connected rooftop solar plant would cost about Rs 65,000 while the cost of battery backup plant would be around Rs 85,000 to Rs 1.10 lakh depending on the battery capacity. If the custom duty on the solar module was hiked to 25 per cent, the project cost will also go up correspondingly,” said S Jeyabalan, joint secretary, Tamil Nadu Solar Energy Developers Association.

 Not only solar modules, most of the electrical equipment, including inverters are being imported from China, he said.

 A solar power developer said that the Centre’s move to increase the duty without having adequate manufacturing capacity would only affect achieving the ambitious target of having 1.75 lakh megawatt of renewable energy by 2022, including 1 lakh MW solar capacity.

 “Solar modules can be imported from Korea, Japan and Germany, but it would be very expensive compared to China,” he said, noting that the domestic solar module manufacturers were largely dependent on China for the raw materials, including solar cells. An official of the Tamil Nadu Energy Development Agency said, “In India, we don’t have any solar module manufacturers. Instead, they are only assembling the module by importing components from China.”