India's new solar policy
The Indian government has adopted new feed-in tariffs, and off-grid solar is also to be promoted. But India has made it clear that recent reports about protectionist measures are unfounded. Nonetheless, India plans to ramp up its domestic production capacity.
As Renewables International recently reported, the potential for the Indian solar market is impressive. The Indian Ministry for New and Renewable Energy (MNRE) has introduced feed-in tariffs, which it calls generation-based incentives (GBIs), for the grid-connected solar arrays with a nominal output of 100 kilowatts to two megawatts. Overall, there is a budget for 100 megawatts of such systems. In addition, the GBI program covers small arrays with an output up to 33 kilowatts.
The Indian Renewable Energy Development Agency (IREDA) will pay the funds to state utilities when they purchase power from such arrays. The price is 12.41 rupees (around 0.18 euros) per kilowatt-hour.
Other funding is available for off-grid applications. MNRE pays at least 90 percent of the upfront cost of such arrays. Families and living below the poverty line even receive the full cost covered. However, there is a ceiling of 18,000 rupees (around 263 euros) per household. The government supports all other solar arrays – both photovoltaics and solar thermal – with a 30 percent upfront bonus on system cost and a five-percent interest rate on loans.
IREDA has also denied reports that it plans to impose import duties on solar components from China. Debashish Majumdar, director of IREDA, says India's rules are not China-specific, and he suspects that the Chinese solar industry is overreacting because it is worried that it might not benefit from the growing solar market in India despite its tremendous production capacity. "If the Chinese want to have a piece of the pie in India, they are welcome to come here and set up production lines," explains Debashish Majumdar.
The Chinese might not be happy about that news, however. The volume of solar products traded between India and China is very low at 300 to 400,000,000 dollars per year and will hardly affect the Chinese solar sector, explains Tang Xiaodong, analyst at Chinese market research firm CEBM of Shanghai. He points out that India remains reliant upon imports of solar components. "Production capacity in India is quite low, but the market could grow over the long term. India is now supporting foreign firms to set up production lines in India. That could be one way to protect the domestic solar industry and create jobs at home." (Sven Ullrich / Craig Morris)
