Indian Solar Firms 'Seek Import Duties' on Thin-film Panels

Indian solar companies are calling on their government to introduce import tariffs on solar panels as they struggle to make sales in the fast-growing domestic market.

The companies want Delhi to implement a 15% duty on imports of thin film panels, Indian Renewable Energy Ministry Secretary Tarun Kapoor tells Bloomberg.

A local media report suggests that companies want tariffs introduced on all solar panel imports. Indian firms are also said to be discussing possible action against imports of Chinese panels.

India has set ambitious targets to ramp up its solar power production, with plans to build 1GW of solar capacity by 2013 and up to 10GW by 2017. But despite criteria in a national incentive programme stipulating the use of locally made solar cells and panels, local manufacturers say orders have dried up.

The chief executives of Indosolar, India's largest panel maker, and Tata BP Solar, the country's third biggest, tell the Hindu Business Line newspaper that they have halted production. Neither CEO could be reached by Recharge today to confirm the reports.

However Indosolar was downgraded by Fitch Ratings earlier this month to a 'D' rating from previous 'BBB-' after the company defaulted on long-term bank loans. It has been hit hard by the decline in solar cell prices. "Cell production became unviable and was stopped by the company at its manufacturing facility at Greater Noida (Uttar Pradesh) in June 2011," according to the ratings agency.

Most of the recent orders in India are thought to have been won by Chinese and US companies. Incentive programmes in states such as Gujarat and Rajasthan do not require locally made equipment.

And in the national-level Solar Mission programme, foreign thin-film makers benefit from an exemption to the criteria for locally made products.

Indian solar companies' calls for protection in their home market come after a US-based group of solar panel makers also sought action against Chinese solar firms exporting to the US. US companies allege China is selling panels at prices below production cost with the help of unfair backing from state banks.

The US International Trade Commission said earlier this month that there is "a reasonable indication" that US crystalline silicon PV manufacturers have been damaged by Chinese cell and module imports.