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India’s Largest Solar Program Won’t Follow Federal Import Curbs

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April 20 (Bloomberg) -- India’s largest solar power program in Gujarat state won’t follow the lead of the central government in imposing restrictions on imports of equipment for projects.

“We don’t want to link manufacturing with generation,” D.J. Pandian, Gujarat’s principal energy secretary, said in an interview. “There will be no requirement of local content.”

The central government ruled projects in its Solar Mission program must buy panels and cells locally, sparking a protest from U.S. Under Secretary of Commerce for International Trade Francisco Sanchez, who said it’s an “unfair trade practice.” Japan and the European Union have also taken Canada to the World Trade Organization over similar provisions in Ontario’s program.

Gujarat plans to award licenses for new plants this year after building up 600 megawatts of solar capacity, the most of any Indian state. The administration is waiting for the central government to announce the rules for its next solar auction so policies can be aligned, Pandian said today in Gandhinagar.

The western state plans to generate 20 percent of its electricity from clean sources by 2020, requiring construction of least 10,000 megawatts of renewable power plants, he said.

About 350 megawatts of the 958 megawatts of solar capacity awarded by the state missed a January deadline for completion. While developers will be allowed to press ahead with the plants if they can finish by Dec. 31, they will receive a lower rate for their power from the state-run utility, Pandian said.

“We hope they decide to complete them,” he said. “These projects are still viable even at the lower tariff.”

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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