India May Extend Local Equipment Usage Rule for Solar Power Beyond 2013

India may expand its rules that require solar-power projects to use domestic suppliers for a portion of their equipment, a government official said.

A regulation that Indian-made equipment be used in solar plants may be extended beyond 2013 to include inverters, Deepak Gupta, secretary of the Ministry of New and Renewable Energy, said at a conference in Mumbai.

“It’s a good idea for inverters to be made in India," Gupta said. "The time has come.” Inverters help convert the current from a solar panel into a voltage that is usable by common electrical appliances.

India, which has about 300 sunny days a year on average, aims to generate 20,000 megawatts of solar power by 2022 under a government-incentive program called the Solar Mission. Its local content rules are aimed at avoiding the problem faced by countries like Spain, where large government subsidies to the sector failed to produce green manufacturing jobs because investors imported most of their panels from overseas.

Under the first phase the program that runs until 2013, solar thermal projects have to source 30 percent of their equipment from India. For photovoltaic plants, the first 150 megawatts of projects will have to be built using silicon modules made in the country, while the following 300 megawatts of capacity will have to use both Indian modules and cells, the government said in a Dec. 8 statement.

Auction Winners

India could have the capacity to produce as much as 4,000 megawatts per year of solar equipment by 2022, Gupta said. The government will announce the winners “any day now” of its first solar auction, which will award permits to project developers to build 620 megawatts of capacity, Gupta said.

Developers offering to sell their electricity at the cheapest rate will be picked under the auction’s rules. The average bid for photovoltaic plants was to sell one kilowatt- hour of electricity at 12.16 rupees (27 U.S. cents) compared with the government’s proposed rate of 17.91 rupees.

The average solar thermal bid was for 11.48 rupees per kilowatt-hour compared with the government rate of 15.31 rupees, Gupta said.

To contact the reporter on this story: Natalie Obiko Pearson in Mumbai at npearson7@bloomberg.net.

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net

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