SECI Ill-designed 10 GW Solar Tender Fails to Gain Interest

Stagnation in the Indian Solar industry

The Indian government has made a massive mess of solar manufacturing policy leading to the closure or sales of multiple long existing solar manufacturers in the country. There has been a complete lack of a cohesive policy and ad-hocism which has contributed to the sad state of solar manufacturing in the country. Despite being the second largest market in the world for solar panels, India is importing more than 90% of its panels from outside. The country possesses the skills, technology and raw materials to produce all of this equipment inside the country.

The 10 GW solar manufacturing linked tender is a good example to prove how bad policies have ruined the industry. A 25% safeguard duty which was imposed after numerous delays to promote the industry will not do much good, as it is only for two years and nobody sets up a factory with a time horizon for two years. While it will provide a temporary respite for some of the solar panel makers in the country, there are hardly any new investments being made at scale to take advantage of this tariff.

The 10 GW tender which has a 3 GW manufacturing linked to it is being extended for the umpteenth time as there is no interest in this tender. There is a cap on tariffs which make no sense since auctions are supposed to be market-based mechanisms which are devised to discover the true prices of the services. There is also little interest as the conditions are cumbersome and there is no clarity on what one would do with this 3 GW of manufacturing, once the solar projects are built. The government is not trying to make the industry competitive by providing a long run roadmap. Existing manufacturers are also not getting to play in this tender which means that existing players are being left to die.

The latest from SECI is that they are again pushing the date to 12^th November as they try to salvage the disaster that this manufacturing tender has turned out to be.