The recently concluded reverse auction for 500 MW by Guajarat Urja Vikas Nigam Ltd (GUVNL) demonstrates that the estimates made by the Indian Solar Manufacturers Association (ISMA) about price due to anti-dumping measures could hover around ₹3 a unit.
In the bids offered by the selected developers, Kalthia Engineering and Construction Ltd with 50 MW at ₹2.98 per unit, Gujarat State Electricity Corporation with 150 MW at ₹3 per unit, Acme Solar Holdings with 100 MW at ₹3.06 per unit and Azure Power with 200 MW at ₹3.06 a unit, the price range has been closer to what the ISMA had projected, if the safeguards and anti-dumping measures were to be implemented.
Safeguard duty
In the application made to the Directorate General of Safeguards, ISMA has estimated that even with the modest duty of 20 cents per Wp, the increase in power tariff will only be ₹0.70 per unit.
ISMA had hinted such duty could increase the lowest bid of ₹2.44 unit to ₹3.14 per unit.
The DG Safeguards had recommended safeguards duty of 70 per cent, which was opposed by some developers and ISMA projections were criticised as speculative.
Dhruv Sharma, ISMA Member and CEO of Jupiter Solar, told BusinessLine that, “The tariffs quoted factoring in the safeguards measures are close to what ISMA had predicted. This has busted the myth that the solar price bids would go to ₹3.50 and beyond.”
He said such tariffs could be achieved despite the imminent safeguard duty demonstrates that ISMA’s position is based on ground reality.
While the customs notification levying the duty is yet to be issued, there have been varying estimates about its impact. ISMA has yet again appealed to the government for expeditious completion of the safeguards investigation which will protect domestic manufacturing, employment and check huge outflow of foreign exchange.
Even the lowest tariff of ₹2.44 per unit quoted in the past, a substantial portion of the amount is remitted abroad on account of imported solar cells and modules.
Such transactions have encouraged imports from China, Malaysia and Taiwan.
Mentioning about the recent bids, the ISMA representative said: “We believe around ₹3 per unit is clearly the right price even after factoring safeguards. However, there is always the potential for price fluctuations due to other variables, including increase in input costs.”