Friday, August 29, 2014: In an ongoing trade war with the US at the World Trade Organisation (WTO) India has raised stakes by kickstarting a campaign which is ambitious enough. This campaign promotes solar energy through the Indian Army and central public sector units (CPSUs). It provides them grants so that equipment get sourced from domestic manufacturers.
Indian Railways has also been enlisted in this campaign for future. As per the plan the government will extend financial support of up to Rs 10 million per MW to the agency which will be selected to install the large solar capacities. The scheme has been termed as “WTO-compliant” and it comes in the backdrop of the Geneva-based global body setting up a dispute settlement panel. This panel will hear a complaint by the US against India’s domestic content requirements under the national solar power programme. Union minister of coal, and new and renewable energy, Piyush Goyal, told the Parliament earlier this month that the defence sector and government undertakings are promoting domestic solar manufacturers and they would set up solar projects totaling 1,000MW each.
Goyal also said that the solar scheme was “WTO-Compliant”. The government has planned to provide viability gap funding (VGF) of Rs 10,000 million for installing grid-connected solar projects of 1,000MW by the Indian Army. These plants will provide electricity to this largest group of consumers at a tariff of Rs 5.50/unit. A senior government official also said, “Meetings have already been held for VGF to CPSUs for setting up solar projects. It is proposed to provide a viability gap funding through Solar Energy Corporation of India (SECI) at a fixed rate of Rs.1 crore per MW for projects where domestically produced cells, modules and inverters have been used, and Rs.50 lakh per MW would be provided in cases where domestically produced modules and inverters have been used.”
An investment of Rs 80 million is required for setting up solar photovoltaic power projects. Another official said, “There is a clause in WTO that domestic equipment can be used for security requirements as the defence establishment would not like foreign equipment. We are using this provision. Also, in WTO, there is a provision which states that government can do domestic procurement for its own requirement, so we came up with the idea of procurement by CPSUs. Both of these sourcing are WTO-compliant. This is the strategy behind this. We are also planning to bring the Indian Railways onboard.” The Jawaharlal Nehru National Solar Mission was launched in 2010 in India and it plans to add 20,000MW of grid-connected solar power. However, the US complained about India’s domestic content requirements under its solar energy programme for solar cells and solar modules.
