Ajay Goel - Anti Dumping Duties on Solar Won't Lead to Sharp Price Increases - India Renewable Energy Consulting – Solar, Biomass, Wind, Cleantech
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It has been the raging debate last few weeks in the Indian solar power circles – Will there or won’t there be anti-dumping duties on solar cells and modules?

Recall that the Directorate General of Anti-dumping has recently recommended ADD, which will come into force once the Ministry of Finance notifies it.

Large scale solar power developers are not pleased at all about the ADD – why would they when they know that there is a significant chance that capital costs of solar PV power plants could increase?

Prominent solar panel and cell manufacturers obviously belong to the opposite school of thought – they argue that indigenous manufacturing needs to be supported for the solar industry to grow and mature in India.

Ajay Goel, CEO of  Tata Power Solar, is in a rather unique position while joining the debate – his company both makes solar gear as well as is a prominent developer of solar power plants.

So, which side does he bat on?

In a recent interview with M Ramesh of Business Line, he bats in favour of ADD.

His logic can be summed as follows: While ADD will increase the prices of panels by 10-20%, it is only fair as it fights against unfair subsidies and dumping by other countries; in addition, this pain of added cost will not be forever and will need to be tolerated taking a long term view to develop the solar manufacturing ecosystem in the country.

Some interesting points he makes in the interview

  • Domestic content requirement (DCR) is a short term, stop-gap arrangement which will not much benefit indigenous solar gear manufacturers
  • While there could be a short term negative impact on the overall solar power market in India owing to the increase in prices, in the medium and long term the market will continue to grow and will not shrink because of this (he gives the example of the US Solar market which did not shrink after the imposition of ADD)
  • For the Indian industry to look at emerging technologies such as CIGS and integrate them into our manufacturing setup and develop more integrated solar manufacturing ecosystems than are available currently, a longer term view in terms of investments etc are required

Interesting arguments indeed. Not conclusive of course, but coherent.

I am all for ADD. I can’t state it in simpler terms.

I know my friends in the solar sector (most of who happen to be developers) will not like my opinion, but I am fairly convinced that the WTO, free market, open competition, absolute fairness while dealing with the global market and of course looking for lowest priced solutions, are all just a pack of bull. There is really no free market in the world. Countries have to create the markets they desire. And India needs to have a solar market in which a larger section of the society is involved in it and benefit from it. This can happen only if there are large-scale manufacturing ecosystems. And to get there, we have to start today. If USA and China do not like us for this, so be it.

If you are a keen worshipper of the stock market and look at share prices every day and quarterly results in your opinion are the key indicators of success, you no doubt will think ADD is retro.

But if you look at building a sustainable solar ecosystem whose foundations are strong, you need to be more patient. Quarterly results and year-on-year market growth in the short term are transient. A well-founded ecosystem that benefits diverse sections of the country and society are permanent.

I look forward to ADD soon. I voted against Modi (and will again, given a chance), but I will certainly appreciate if his government brings ADD at the earliest.

About Narasimhan Santhanam (Narsi)

Narsi, a Director at EAI, Co-founded one of India's first climate tech consulting firm in 2008.

Since then, he has assisted over 250 Indian and International firms, across many climate tech domain Solar, Bio-energy, Green hydrogen, E-Mobility, Green Chemicals.

Narsi works closely with senior and top management corporates and helps then devise strategy and go-to-market plans to benefit from the fast growing Indian Climate tech market.

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