Tariffs dropped at NTPC’s latest auction of 2,000 MW of solar projects on Tuesday, suggesting that developers have not yet begun factoring in the safeguard duty of 25% imposed on imported solar panels by the Directorate General of Trade Remedies (DGTR).
The winning tariffs were all in the range of Rs 2.59-2.60 per unit, which is lower than the tariffs reached at NTPC’s last such auction of 750 MW in May where the lowest were Rs 2.71-2.72. The winners in Tuesday’s auction were Acme Solar Holdings that got 600 MW, Shapoorji Pallonji Infrastructure (500 MW), Azure Power (300 MW) — all of them bidding Rs 2.59 per unit — and SB Energy, the joint venture of SoftBank, Foxconn and Bharti Airtel.
The DGTR imposed the safeguard duty of 25% for a year from July 30, followed by 20% for the next six months and 15% for another six, maintaining it was required to protect the local solar manufacturing industry. Over 90% of solar panels and modules used in Indian solar projects are imported, mostly from China and Malaysia, mainly because locally manufactured equipment cannot match their prices.
However, with developer Acme Solar contesting the DGTR decision on safeguard duty in the Odisha high court, its imposition has been stayed till the court reaches a decision. Developers are being allowed to get their consignments of imported solar panels and modules released by the customs at ports by simply executing a bond for the same. They are strongly opposed to safeguard duty since it is bound to raise their input costs and consequently tariffs.
The winning tariff in NTPC’s Tuesday auction is, however, higher than the tariff of Rs 2.44 per unit reached at two auctions conducted by the Solar Energy Corporation of India in July and once in May 2017. The rate remains the lowest ever reached. In both July auctions, the lowest bidder was Acme Solar.