China makes up 80% of the total imports
for the Indian renewables industry. This figure balloons to 95%, when
Chinese-origin companies operating out of Vietnam and Thailand are taken into
account. The rest is fulfilled by Indian companies.
Leading Chinese solar equipment
manufacturers are once again threatening to pull out of supply contracts to
Indian power developers, a second such instance in four months.
Chinese solar manufacturing companies JA
Solar, Trina Solar, and Risen Energy have threatened to pull out of existing
contracts blaming the global commodity supercycle that has led to a surge in
prices of polysilicon, the main raw material used in the making of solar
panels.
However, Indian power companies are
alleging collusion by the Chinese players to artificially hike prices.
This could affect multiple gigawatts
worth of projects currently under construction by Indian developers. Leading
companies such as Avaada Energy, ReNew Power, Azure Power, O2, and Greenko are
stressed because of the potential delays this dispute could potentially cause.
China makes up 80% of the total imports
for the Indian renewables industry. This figure balloons to 95%, when
Chinese-origin companies operating out of Vietnam and Thailand are taken into
account. The rest is fulfilled by Indian companies.
The companies have now moved to the
Ministry for New and Renewable Energy (MNRE) to blacklist JA Solar and revoke
its BIS approval, which would bar them from selling goods in India.
Cost of solar modules, which is measured
per watt, was USD 18 cents per watt last September. This rose to 22 cents
earlier this year, and Chinese suppliers have now increased it to 24 cents,
executives said.
"These prices will make viability of
the projects at the promised tariffs impossible," a top executive told ET.
This company has nearly 4 gigawatt (GW) of projects scheduled to be completed
by the end of the current fiscal year.
Prices of polysilicon have gone up by
343% since July last year, and zoomed by 148% since January alone, resulting in
module costs surging by 33%.
"These companies are leveraging
their control over the prices of the modules, raw material, etc., to extract
money from the Indian developers who are under pressure to meet
deadlines," said another developer on the condition of anonymity.
"The malpractice indicates
cartelisation, which is not in the interest of India," the executive
added.
Mails sent out to top officials at JA,
Trina, and Risen remained unanswered till press time Monday.
Solar modules make up 60% of any
renewable project's capital expenditure.
A safeguard
duty (SGD) of 14.5% is in place until the end of this month to prevent the
dumping of Chinese goods. The government will also levy a basic customs duty
between 25 to 40% from April 2022 to reduce the Indian renewable industry's
dependence on China.
Indian developers were hoping to exploit the eight
month gap and stockpile solar modules for future projects, but the rise in
panel prices since last June has prevented them from placing future orders. economictimes.