900 MW solar power project put on hold ‘due to lack of supply of domestic solar panels’

• Scatec had entered the Indian market last year by partnering with Acme Solar to build a 900 MW solar power project in Rajasthan
• Import duty on solar panels takes effect on April 1

New Delhi: Norway-based Scatec and Acme Solar have announced their decision to put on hold a 900 MW solar power project in Rajasthan due to "lack of supply of domestic solar panels and the imposition of 40 percent import duty on solar panels from April 1 this year." Scatec had entered the Indian market last year by partnering with Acme Solar to build a 900 MW solar power project under a 25-year-long Power Purchase Agreement (PPA) with Solar Energy Corporation of India (SECI). 

In its quarterly earnings report, Scatec said on Thursday, "Scatec and Acme have decided to put the 900 MW project in India on hold due to lack of supply of domestic solar panels and a 40 percent import duty on solar panels to be imposed from 1 April, 2022. Due to the above, the project has been moved from backlog to pipeline." In addition to India, Scatec has also put on hold a bunch of other solar power projects in Brazil, South Africa and Tunisia on hold.

'Construction expected to start in 2022'

While noting that the start of construction for projects put on hold will depend on final government approval processes, Scatec said, "Based on the current status of these processes it is expected that construction start for all backlog projects will be in 2022." For the 900 MW solar power project in Rajasthan, construction was yet to begin. It was scheduled to be completed in 2022.

Backdrop

In order to cut India's dependence on China for import of solar modules and other solar power equipment, the Centre had decided to impose an import duty of 40 percent from April 1 this year. In the Budget 2022-23, the government has also increased the allocation for the Production-Linked Incentive (PLI) scheme for solar PV manufacturing by Rs 19,500 crore. The scheme can lead to the setting up of 30-35 GW of solar module capacity and 25-30 GW of cell capacity by 2024, experts have said.

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