This is the second time in the past four months that the leading Chinese solar manufacturers are threatening to pull out of supply contracts to Indian power developers.
Earlier, Chinese solar module manufacturers had done this to renegotiate the prices, in which large solar cell producing companies such as Longi Green Technology were also involved.
Currently, the leading Chinese manufacturing companies JA Solar, Trina Solar, and Risen Energy are involved in it. These solar manufacturers say that the reason for this re-occurring difference is attributed to the global commodity supercycle, & the price of polysilicon, the main raw material used to make solar panels, has increased.
However, Indian power companies believe that Chinese companies are doing this deliberately, for which the prices of solar panels are being increased artificially.
The impact of these Chinese manufacturers’ problems can affect India’s set solar target (100 GW by 2022), due to which leading companies like Avaada Energy, ReNew Power, Azure Power, O2, and Greenko are under stress.
At present, the Indian renewable energy industry is dependent on almost 80% of Chinese manufacturers. Apart from this, 15% of the solar products which are coming from Thailand and Vietnam are also manufactured by Chinese companies. Thus, 95% of India’s total renewable energy industry is met by Chinese manufacturers, and only 5% is contributed by Indian manufacturers.
Indian solar companies have urged the Ministry of New and Renewable Energy (MNRE) to blacklist JA Solar and revoke the approval of BIS. Once approved, JA Solar will be unable to sell goods in the Indian market. Which will prove to be a big setback for the Chinese manufacturers, as we have mentioned earlier that India is a leading solar market in the world.
According to a reliable source, top executives of a solar company said, “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.
These prices will make the viability of the projects at the promised tariffs impossible.”
This solar company has around 4 GW of projects scheduled to be completed by the end of the current financial year.
According to the report, the polysilicon prices had increased by 343% since July last year including a rise of price by 148% since January, because of it, the module cost has increased by 33%.
According to another reliable source, “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. The malpractice indicates cartelization, which is not in the interest of India.”
60% of the total solar project cost is of the solar modules which means if the cost of solar modules is increasing then the total cost of the project will also rise.
To prevent the dumping of Chinese goods, the government has imposed a Safeguard Duty (SGD) of 14.5%, which is valid only till the end of July 2021. Along with this, The government will also impose a basic customs duty of between 25 and 40% from April 2022 to reduce the dependence of the Indian renewable industry 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 (2021) has prevented them from placing future orders.
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