Ray Of Light For Solar Developers In India

India May Delay BCD Imposition Or Extend Commissioning Deadlines
10:35 PM (Beijing Time) - 11. October 2021
Presentation1

Chinese module suppliers to India are reportedly charging hefty prices of late in response to high demand before Basic Customs Duty (BCD) comes into effect from April 1, 2022. Indian developers want the government to empathize. (Illustrative Photo; Photo Credit: Humphrey/Shutterstock.com)

Key Takeaways

  • ET has quoted MNRE Minister RK Singh as saying his government may either postpone BCD imposition on solar or extend project commissioning deadlines
  • Industry associations have approached the ministry with this demand since Chinese companies are selling their products at hiked prices
  • Prices are being increased citing raw material shortage, logistical challenges and power cuts in China

India may be looking at providing relief to solar energy developers in the country in terms of either extending the impending Basic Customs Duty (BCD) imposition that’s due to come into effect from April 1, 2021, or extending project commissioning deadlines, a local business daily reported.

To exacerbate the situation for solar developers in India, the coal shortage leading to major power outages in China is impacting industrial activity. With this, the Indian developers complain that Chinese solar suppliers are charging over 1.5 times of the contract value, also taking into account hiked prices for raw materials due to limited supply in the global markets. Logistics and shipping charges are not making life any easier either.

Speaking to The Economic Times (ET), RK Singh heading the Ministry of New and Renewable Energy (MNRE), said his office has been approached with the demand for the same since Chinese suppliers—on whom the majority of India’s solar installation numbers depend currently—are invoking force majeure clause for delaying solar supplies. MNRE, however, is yet to take a call on the matter.

According to the report, India’s Solar Power Developers Association (SPDA) wants the ministry to extend the BCD deadline by a year since the current deadline is ‘benefitting Chinese companies’. This additional year should see additional domestic manufacturing capacity to be installed which will lower their dependence on Chinese imports.

Another local association, the National Solar Energy Federation of India (NSEFI) has also reportedly requested the government to defer the BCD imposition by 6 months, and come into effect by October 1, 2022.

The report points out that the contracts for upcoming solar power plants make it the obligation of the developer to bear any increase in the cost of inputs, unless there is a change in law or force majeure, hence the demand for extension.

In July 2021, MNRE had extended renewable energy project commissioning deadline for facilities impacted by the 2nd wave of COVID-19 in the country considering the period of impact as between April 1, 2021 to June 15, 2021 (see India PV News Snippets: JMK, GAIL, CIL, MNRE, Saatvik).

Meanwhile, some of the leading Chinese solar module suppliers, namely LONGi, JinkoSolar, Trina Solar, JA Solar and Risen Energy have called on the developer community to delay their project commissioning deadlines considering the expected under-utilization of their fabs with raw material supply shortages and power cuts in China (see Chinese Solar Companies Want Action).

Anu Bhambhani

Anu Bhambhani is the Senior News Editor of TaiyangNews

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Anu Bhambhani