Indian solar-power developers and
their suppliers will meet with government officials to try to
resolve a price dispute that risks handing ammunition to U.S.
exporters complaining they face unfair trade hurdles.
The officials will meet with both sides this week, said
Rajendra Nimje, head of state-run Solar Energy Corp. of India,
which ran the central government’s $900 million auction of solar
permits for 750 megawatts of capacity in February.
Tata Power Solar and Indosolar Ltd. (ISLR), among India’s largest
solar-cell makers, denied raising prices after projects were
awarded at the Feb. 21 auction that also required half of the
capacity to be built using equipment from domestic producers.
“I categorically deny that Indosolar has raised prices
recently,” Managing Director H.R. Gupta said in an interview.
Developers may have got unreliable quotes from contractors or
panel makers when preparing their bids, Tata Power Solar, a unit
of India’s biggest industrial group, said in an e-mailed
response to questions.
The National Solar Energy Federation of India accused cell
makers of raising prices after the auction in a letter to the
Ministry of New and Renewable Energy copied to Bloomberg News.
The ministry confirmed it received the letter.
The dispute risks aiding U.S. efforts to dismantle the
auction rule that seeks to boost local manufacturing by
restricting some imports. The U.S. filed a complaint at the
World Trade Organization saying India unfairly protects local
producers. India is also paying higher subsidies for projects
won at the February auction using domestic content.
Indian solar-panel prices rose about 15 percent to 16
percent after permits were awarded at the sale, making projects
won unprofitable, according to the letter from the lobby
representing developers and panel makers.
“Developers are facing tremendous challenges,” the group
said. About 65 percent to 70 percent of the projects may not be
built because local cell makers lack capacity to fulfill orders,
it said. Banks also don’t want to lend to projects using Indian-made equipment because of quality concerns, it added.
The lobby wants the government to almost double the time
allowed to complete projects using local equipment to two years.
Indosolar and Tata Power said the price of wafers, a key
import used to make solar cells, have risen. Term sheets issued
to 23 panel makers since December allow for any gain in wafer
costs to be passed on, according to Indosolar’s Gupta.
The average benchmark world price of multicrystalline
wafers rose 8.6 percent since December to $1.01 each this week,
according to data compiled by Bloomberg New Energy Finance.
As long as orders are placed by the end of April, the
domestic industry can supply enough equipment on time to meet
the program’s needs, according to Tata Power Solar. “Delaying
of the ordering process by developers would put the entire
program in jeopardy,” it said.
To contact the reporter on this story:
Natalie Obiko Pearson in New Delhi at
To contact the editors responsible for this story:
Reed Landberg at
Tony Barrett, Ana Monteiro