Indian States May Scrap Solar Projects on Duties: ACME

India’s plans to impose duties on solar equipment imports threaten as much as 3,500 megawatts of planned and contracted projects, according to ACME Group, one of the biggest winners in the country’s last auction of permits.

“Most projects will get affected because they didn’t plan for this,” said Manoj Upadhyay, founder of the group, which has built 43 megawatts of solar projects. Electricity from the sun would no longer be cost-competitive with peak-power prices on the grid if the levies are implemented, he said.

State governments in Punjab, Uttar Pradesh and Tamil Nadu alone could cancel agreements for 1,500 megawatts of plants, Upadhyay said in an interview in Gurgaon, near New Delhi.

Under the contracts, developers are allowed to go back to the state governments and request that the extra cost of the taxes be passed onto consumers. State officials are unlikely to accept that and will probably opt to abandon the projects instead, he said.

The Ministry of Commerce & Industry recommended anti-dumping duties ranging from 11 cents to 81 cents per watt on U.S., Chinese, Malaysian and Taiwanese solar imports on May 22, four days before Prime Minister Narendra Modi’s government took office. The Ministry of Finance has until Aug. 22 to implement the duties.

ACME Solar Energy Pvt., which is part-owned by Electricite de France SA (EDF)’s renewables unit, was one of the biggest winners in a national solar auction, taking at least 80 megawatts, according to results announced in February.

The company plans to build 1,000 megawatts of solar capacity by 2017. EDF Energies Nouvelles and Luxembourg-based Eren Groupe SA bought a 50 percent stake in the unit last year.

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

To contact the editors responsible for this story: Reed Landberg at landberg@bloomberg.net Alex Devine, Tony Barrett

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