Solar Developers Fear Module Price Hikes Aftermport Duties on Solar Glass

Solar project developers anticipate a rise in module prices to drive upoverall project costs following the recent import duties on solar glass.

Recently, the Ministry of commerce and industry imposed anti-dumpingduty in the range of $658/MT to $664/MT for imports from china and$570/MT to $664/MT from Vietnam. The Ministry also imposedcountervailing duties ranging from $539/MT to $664/MT.

Glass manufacturer Borosil Renewable initiated the investigation into thealleged dumping of solar glass from China and Vietnam into thedomestic market.

Borosil said, "We firmly believe that while restoring fair competition andcreating a level playing field for domestic manufacturers, this willencourage rapid and significant growth in domestic manufacturing ofsolar glass, leading to exponential growth in india's solar glass industry.

While domestic solar glass manufacturers welcomed the imposition ofduties, solar developers fear project costs will increase as module pricesrise.

Laxit Awla, CEO of SAEL, opined that the price hikes resulting from theseduties are high enough for foreign suppliers to absorb them internally."The cost increases are likely to be passed over to developers. Given thecompetitive margins, this price increase will likely result in higher bids for upcoming solar projects.

Other developers like Hanish Gupta, Managing Director at sunkind Energyconcurred."As a direct result of these duties, Approved List of Models andManufacturers (ALMM)-compliant solar module prices have increased byabout zl,000 (~$11.46)/kw, creating added pressure on project costs.

Indian consumers, including developers, would also face challenges fromlikely limitations in sourcing materials matching the quality and reliabilityof imported products."While imposing safeguard duties supports localindustries, it also creates short-term hurdles for consumers relying onaffordable, high-quality imports.'

Gupta said there would be a supply shortage as an immediateconsequence of duty imposition due to increased module costs

Mercom had estimated that duty imposition could increase moduleprices to approximatelyz450(~$5.30)/module of 540 wp -550 Wpresulting in an increase of z0.80 (~$0.0094)/Wp to z0.90(~$0.011)/Wp.Some domestic manufacturers had also increased prices by E2(~$0.024)/wp to2.5(~$0.029)/Wp.

Developers foresee a substantial but gradual shift away from importedcomponents.

According to Awla, the domestic manufacturing sector is still scaling upcapacity."Until indian manufacturers fully bridge the gap in productioncapacity and quality standards, imports will continue to play a role inmeeting the needs of developers, albeit at reduced levels due to thehigher costs associated with duties. Over time, as domestic capabilitiesimprove, reliance on imports is expected to decline further."Concerns regarding domestic manufacturers' capabilities to match thequality and reliability of imported modules remain, given their relativelyrecent entry into large-scale production compared to established globalplayers.

Developers are worried about efficiency gaps and real-worldperformance compared to imported modules. in the past, developershave faced issues such as higher degradation rates and lower conversionefficiencies, which can impact project returns and profitability.

Awla said it is too early to comment on whether developers would invokea "change in law" event following the imposition of duties on solar glassimports. "At this stage, it is difficult to predict whether developers wouldinvoke 'change in law' clauses due to module price changes resultingfrom anti-dumping duties. However, given that such regulatory changescan siqnificantly impact project economics, developers may explorecontractual provisions allowing adjustments or compensation underunforeseen regulatory shifts.

Gupta said some developers might invoke change-in-law clauses tosafeguard their financials, while others may absorb the additional costsdepending on their contracts and project margins.

Solar developers caution that any further duties must be carefullycalibrated according to prevailing market conditions. Awla said thatconsidering india's rapid growth trajectory and increasing demand forsolar energy solutions, excessive or poorly timed duties could posechallenges for manufacturers and developers alike.

Gupta added that duties should only be considered after strengthening

domestic manufacturing.increasing duties without ensurirsufticlentsupply and quality control will only drive up costs, making projects lessviable while imports continue to fill the gap.