NEW DELHI: The government received expressions of interest on Thursday to build a production capacity of nearly 35,000 MW for solar systems, union electricity and renewable energies, said RK Singh.
If the deals were successful, they would result in the first large-scale plan to establish ingots and wafers in the country. According to industry estimates, India currently has a production capacity of 3,000 MW for cells and 10,000 MW for modules.
“We are interested in building a production capacity for 20,000 MW solar modules, 15,000 MW solar cells and a similar amount of bars, wafers, etc.,” said Singh.
He also said talks are ongoing with the Treasury Department to implement the basic duty on foreign solar imports. “I reminded the finance minister that we are waiting for customs. They (the domestic industry) are all waiting for customs,” added the minister.
Domestic manufacturers have anticipated the tax on solar panels since FM Nirmala Sitharaman included it in their proposal for a union budget earlier this year. RK Singh told reporters in June that such a basic customs duty should be introduced from August 1st to prevent the dumping of Chinese goods and protect the national interests from which 80% of the solar panels come.
However, due to disagreements about the “grandfathering” clause, which would provide for exemptions from electricity purchase agreements that had already been signed, implementation was delayed.
Adding a “grandfather clause” to existing power purchase agreements would mean that there is an understanding between solar developers and the government that the project will cost more than the allocated budget at the time the contract is signed and therefore compensation will be granted to the developers through the distributors.
Instead, a coal withdrawal-based formula will be introduced to offset the losses incurred by the protective and basic tariffs, Singh said. While this is believed to take the strain off the generators, consumers could bear the immediate brunt of such a policy.