Friday, 16 March 2018 16:51

Bid rule update on cards to let solar companies pass on duty changes

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The government plans to amend solar power project bidding norms to ensure that any increase of duties on equipment is passed on to energy buyers, meeting a key demand of private developers. “The government will amend bidding norms for pass through of duties on solar modules to de-risk the projects,” power minister R K Singh, told reporters here on Wednesday.

The proposal comes amid regulatory uncertainty in India’s solar industry as it awaits key decisions on safeguards and anti- dumping duties on solar imports from China, Malaysia and Taiwan. The threat of high duty levies is looming large on the sector, leading to lacklustre response to some of the recent solar auctions.

“Currently the bid documents provide that any change in tax structure will be pass through. We will add duties to the provision so that any changes in taxes and duties will be pass through,” Singh said. The change will have to be included in the PPA (power purchase agreement) document. It is “something which has to ideally be taken up by the Centre and pushed to the states, an industry expert said on condition of anonymity.

A senior government official said this change is necessary to attract competitive bids in auctions.

Industry welcomed the move. “It is a right move. What may happen is that some states and discoms may not be happy with this provision because it puts all the risk on to them,” said Vinay Rustagi, managing director at solar consultancy firm Bridge to India.

“In this scenario, everybody is protected,” he said. “Ultimately it is the discom and the end consumer who have to bear the risk of any increases in duties and taxes. That is why it is important to take them on board before any such change is announced.”

The Director General of Safeguards in January had proposed a whopping 70% safeguards duty on imports of solar cells and modules from China and Malaysia, making a case for "serious injury" to domestic solar manufacturers on account of imports from these nations.

Additional Info

  • News Section: Solar Energy News
  • Month: March
  • Year: 2018
Read 164 times Last modified on Friday, 16 March 2018 16:51