India has become the latest "Photovoltaics" battleground, which centers around protecting local solar panel makers from underpricing Chinese competitors. Indian regulators are planning to impose a customs tariff of 70% on imports, while the country's solar power developers warn that the move could put the country's fast-growing solar power industry at a standstill.
Some of India's largest developers of solar farms are struggling against the proposed regulators' call for emergency tax on solar cells imported from China, Malaysia and the more advanced economies. The program is likely to give China's solar cell industry a greater impact. China has stepped up its solar cell exports to India, partly due to China's domestic over-supply.
Led by Adani Group, a billionaire businessman controlled by Gautam Adani, a group of India's largest solar panel makers called for the tax.
Their claims have been endorsed by the General Administration of Security in India (DGS). The agency said it would propose a tariff of 70%, effective immediately, for 200 days until the agency reached longer-term conclusions on the issue.
But the data caught the angry response of solar power developers. Over the past few years, these solar power developers have lowered their prices, leaving the Indian solar power generation industry at the forefront of the global renewable energy revolution.
The data also sparked criticism from smaller solar-cell makers that regulators put solar-powered raw materials under the purview of the tariff and made them significantly more expensive to make solar panels. Only a handful of Indian companies make solar cells, which are spliced together by solar cells, and the Adani Group will soon become one of them.
Abhinav Mahajan, director of IB Solar, a maker of solar cells near Delhi, said: "This tax is levied on us."
Considering the ambitious plan by Indian Prime Minister Narendra Modi to build 100 GW of new solar capacity by 2022, the program of the General Administration of Safeguards of India is particularly sensitive.
The falling prices of solar panels imported from China over the past two years have made solar developers substantially cut the expected costs of building new solar farms.
However, some industry professionals recently warned that such low prices are unsustainable and that once the price of solar panels unexpectedly rebounds, it is difficult to maintain such a quotation.
India's solar panel makers welcomed the tax package, saying the move is good for Modi's long-awaited boost to Indian manufacturing, which Modi personally calls the program "Made in India."
Adani will not comment on the preliminary conclusion of the General Administration of Safeguards. But Dhruv Sharma, chief executive of Jupiter Capital, another petitioner, has challenged the allegation that the tax would damage India's solar power industry. "If the country does not have manufacturing, how will they sell cheap electricity?" He said, "We want cheap electricity, but beyond a certain point of balance, we have no manufacturing."