Intersolar Bangalore Day 1: Solar Industry Still in a Funk from Safeguard duty and GST

Mercom discussed issues including GST ambiguity, BIS certification, and the safeguard duty with stakeholder attendees


The Indian solar sector is still experiencing a hangover from the safeguard duty imposition and Goods and Services Tax (GST). This appeared to be the popular sentiment of solar project developers and solar component suppliers at the Intersolar conference in Bangalore.

The Intersolar India Exhibition and Conference is a three-day event that kickstarted on December 11, 2018. Mercom’s news team attended the inaugural day of the exhibition and engaged with the solar industry on various issues that lately have been a cause of concern.

Some stakeholders were of the belief that due to the safeguard duty, the market has become slightly stagnant. Even the national implementing agencies such as the Solar Energy Corporation of India (SECI), and the National Thermal Power Corporation (NTPC) are shying away from conducting mega auctions, the stakeholders felt. “They have even refrained from issuing mega tenders as there has been less response to tenders already out there,” one executive told Mercom.

Regarding the GST, widespread opinion appeared to be that there is still lack of clarity on the matter, as the law is still being differently interpreted in various states by their respective agencies and regulatory bodies. “This needs to be clarified once and for all,” reiterated many developers and EPC firms.

Few stakeholders asserted the fact that the government needs to let the market regulate itself without any outside intervention. “Running below cost will result in spurious projects that are good only on paper. As of now, if the best components, balance of systems and the top-quality modules are utilized, a MW-scale project could cost up to ₹40 million (~$0.56 million)/MW; but if the government agencies seek lower costs, developers will have to cut down on these,” one stakeholder told Mercom.

Regarding the BIS certification process,  conversations focused on the fact that initially there were compliance issues, making module manufacturers scrambling to get certified, finding labs, etc. The process has now stabilized, reflected by the increasing number of Chinese module suppliers and manufacturers  that have received and are in line to receive the BIS certification.

Few other stakeholders hinted at the increase of inorganic growth in the Indian market. A growing number of companies are in talks to sell their equities in solar assets and Indian module manufacturers are also looking at selling stakes in solar PV projects they have developed themselves in order to raise operating capital.

On the first day of the event, Mercom India released its white paper “India Solar Market Drivers and Challenges”, in partnership with Intersolar India Conference.