Solar developers step up panel imports as removal of safeguard duty cuts costs

Officers consider the drop would have been considerably larger if the freight value for containers had not doubled within the final 9 month.

Photo voltaic panel costs that rose constantly over the past one 12 months resulting from varied constraints within the provide chain have seen a dip of round Rs 2.5 per Watt peak or as much as 15% after the safeguard obligation on imports ended on July 31.

Near 3000 MW of floor mounted and round 300 MW of rooftop photo voltaic tasks that have been held-up have moved forward, with firms putting orders with panel suppliers from China, South Korea, Vietnam and Taiwan for the subsequent quarter, stated business officers. There’s a none-month out there for builders earlier than the essential customs obligation on panel imports kicks in from April subsequent 12 months.

Animesh Damani, founding father of Artha Vitality advised Fe, “There was a drop of Rs 2 to Rs 2.5/wp in photo voltaic panel costs which is round 11-15% over the July costs. The photo voltaic panel costs within the polycrystalline section are at Rs 18/Wp as of August 31, whereas within the monocrystalline section the costs are at Rs 20/Wp in contrast with the July finish costs.”

Officers consider the drop would have been considerably larger if the freight value for containers had not doubled within the final 9 month.

“The costs would have been decrease by one other Rs 0.87 paise to Rs 1/wp had the freight value not risen to shut to $7000 per TEU (Twenty Foot Equal Models) of a container,” Damani stated.

There was a optimistic influence on margins as nicely for the reason that builders had taken a minimize on their return on investments additionally impacted by cap on web metering for rooftop tasks. Many floor mounted gamers working within the open entry section had taken a minimize on margins and have been working on as little as 10% in contrast with a excessive of 16% a couple of years in the past.

Puneet Goyal, founding father of SunAlpha advised FE: “We now have over booked ourselves for subsequent quarter. However this time we now have ordered from home producers in addition to they’ve optimised their manufacturing and effectivity forward of BCD.”

Going forward consultants opine there can be challenges by way of larger element prices and logistical prices resulting in problem in buying panels at one of the best worth.

Raj Prabhu, CEO of Mercom Capital Group stated, “With duties and import restrictions, buying high quality photo voltaic parts at one of the best worth would be the largest problem for the business going ahead as photo voltaic system prices ticked up for the fourth quarter in a row. The demand for constructing large-scale tasks is extraordinarily excessive, whereas auctions have slowed down.”

Gautam Das, CEO of Oorjan Cleantech stated, systemic interventions like safeguard obligation could also be related to spice up home manufacturing. Nonetheless, the home panel producer can hardly provide solely 25% of the demand now and the Indian photo voltaic market is at a development section. “Safeguard obligation adversely impacts each the price of photo voltaic tasks and tariff to finish customers. Removing of safeguard obligation is a welcome step and the tariff could cut back by 6 -10 paise per unit which is able to improve photo voltaic adoption in India,” Das stated.

“Authorities ought to assess the worldwide provide chain and provide you with various incentives for Indian producers. A balanced coverage method and alternate incentives will enhance home manufacturing whereas sustaining the tempo of photo voltaic adoption,” Das stated.

There are others who consider that break from any type of duties for the subsequent 9 months is a respite that the builders have been badly in search of to finish their tasks and the largest development has emerged from Tier-1 and Tier-2 cities for adoption of photo voltaic..

Mayur Mishra, director and CEO of Corrit Vitality and Infra, a photo voltaic EPC firm stated, “The demand within the final one month has surged. The largest development is witnessed in demand from tier-1 and tier-2 cities the place business and industrial complexes are hybrid mannequin to utilize photo voltaic in case of energy outages and compensate for larger value of diesel. On an funding of Rs 50,000 per 100 kilo watt the builders are more likely to get a payback in 4-5 years,” Mishra stated.