US urges India to open up solar energy market: Things to be cleared
Indianpowersector.com: The US view on the domestic content requirement needed to be cleared.
What is domestic Content Requirement?
The mandatory use of India made equipment in solar power plants is domestic content requirement.
What is its Scope?
The domestic content requirement is only for projects under JNNSM and is not applicable to any state policy projects.
For solar PV projects:
The poly-crystalline module if used should be manufactured in India.
There is no restriction on use of Thin-film module made in other countries. Most of the US firms produce thin-film and this is the technology preferred by the developers in India.
So, the Indian market is almost open.
The United States has urged India to open its market for clean technologies, especially in the area of solar energy, saying openness and competition would benefit both countries.
Voicing his concern over the trend in India towards mandating local production in key high-technology areas, US Under Secretary for International Trade Francisco Sanchez Wednesday said obstacles were preventing the two countries from seizing vast opportunities.
Addressing Solarcon India 2011 exhibition and conference of the Confederation of Indian Industry (CII) here, he urged India to reconsider its policy, saying that competition would attract investment, encourage innovation and increase its manufacturing capabilities.
“We urge the Indian government not to expand India’s manufacturing base through measures like local content requirements and mandatory technology transfer requirements. While they may offer short-term gains, it will hurt local economic development in the long-term,” he said.
“Instead, India should embrace openness and competition. The United States has. As a result, we’ve had foreign firms emerge as leaders in industries. And, we’re better off for it. These companies have created jobs and markets and opportunities for the American people.”
Sanchez, who is leading a trade delegation of US companies involved in clean technologies, said they had the expertise and products to help India’s economic and its ambitious solar development plans.
“Unfortunately, there are a few obstacles that prevent us from fully collaborating and deploying the solar energy technologies we all want to see succeed. One of the biggest obstacles is Local Content Requirements,” he said.
“We must fight the urge to link our promotion of clean energy to policies that protect local industries with unfair trade practices. Local content requirements keep cutting-edge technology out of the hands of project developers, limiting the deployment. Ultimately, they force consumers to pay more for less,” he added.
Stressing the need for partnership, Sanchez said the renewable energy market in India is estimated to be worth over $17 billion and is growing at an annual rate of 15 percent.
“One estimate states that to keep economic growth at current levels, India will need to add 150 gigawatts of capacity over the next five years. That is about one 1,000 MW power plant every two weeks; or, perhaps better for this audience, an 82 MW facility every day for the next five years.”
He noted that India’s National Solar Mission has created a $19 billion plan to produce 20 gigawatts of solar power by 2022.
He said the US government wanted to help India to achieve its energy goals. “We want to work with you every step of the way, throughout the whole supply chain.”
Sanchez pointed out that President Barack Obama and Prime Minister Manmohan Singh had last year reaffirmed their strong commitment towards addressing climate change and energy security by building a clean energy economy.
The US-India Partnership to Advance Clean Energy (PACE) is central to this effort. The Department of Energy’s funding announcement for this initiative was the first venture of its kind ever undertaken with a foreign government, he observed.
The US Export-Import Bank and the Overseas Private Investment Corporation – two other US government agencies – have invested millions in clean energy projects across India.