First Solar, one of the largest manufacturers of solar photovoltaic modules, has taken its first steps into the Indian solar power market as a project developer. By doing so it has also taken a major step towards hedging against the possibility of anti-dumping duties being levied by the Indian government on imported modules.
The US-based PV module manufacturer has announced plans to install a 45 MW solar power project in the southern Indian state of Telangana. The company will set up the project through its Indian subsidiary. About 75 million kWh of DC electricity would be generated from this power plant, which would be sold to the local utility at ₹6.49 ($0.11) per kWh for a period of 20 years.
The company refused to disclose the capital investment required for the project, but as per the prevailing market conditions the project may entail an investment of around $50 million. The construction for the project is set to begin in October this year and the plant is expected to be commissioned by May 2015.
Telangana seems to be a good choice to enter the Indian solar power generation sector. The newly formed state is struggling to augment its power supply resources since its separation from Andhra Pradesh.
First Solar is probably the largest supplier of importer PV modules in the Indian market. The company benefited immensely from the concessional loans granted by the US Export-Import Bank to the Indian project developers who choose First Solar’s thin-film modules for their projects.
Telangana will also host a 1,000 MW solar PV project which will be set up in manner similar to the Gujarat solar park. The Andhra Pradesh government had signed an agreement to set up the project in Mahabubnagar district (now in Telangana).
First Solar is facing anti-dumping duties from the Indian government, which is struggling to meet its aim to promote and strengthen local PV module manufacturing companies. Different ministries in the government are struggling to build a consensus on the issue which has delayed the implementation of the duties. However, a recent report stated that levying these duties would save the country an estimated $42 billion in foreign exchange outgo by 2030.
Venturing into one of the most rapidly growing solar power markets in the world is a smart move on the part of First Solar. The state and central governments together plan to add about 9,000 MW solar power capacity by mid-2017. India currently has an installed solar power capacity of around 2,900 MW.
With a new government in place, strictness in the implementation of the Renewable Purchase Obligation (RPO) is widely expected to be increased; this, in turn, would give a major boost to the demand for solar power across the country.