Acme Solar today has about 2000 MW of projects where construction is either on or yet to begin. However after the recent notification of Finance Ministry on 31 July which notified the imposition of 25% safeguard duty with immediate effect on imported solar cells and modules, ignoring a stay till 20 August on the order in favour of Acme Solar from the Odisha high court.
Acme Solar has threatened to will pull out of recent solar park projects it has won if the state utilities (discoms) it caters to do not cover the 25% safeguard duty now imposed on solar cells imported from China and Malaysia.
Acme Group, said the fact that the safeguard duty was imposed with immediate effect has put ongoing and new projects in jeopardy. “The impact of the safeguard duty can be split into projects that are under construction – such as the Rewa (Madhya Pradesh) and Bhadla (Rajasthan) solar parks – are for about 2,000-3,000 MW, of which on average about 35-45% is ready.
The panels for these projects are either being manufactured, are ready to be shipped to India or are already in transit. For whatever is en route to India, Acme will have to pay the safeguard duty upfront at customs. That impact alone is about Rs 120 crore.
Technically, all taxes and duties imposed on a developer are passed through to the final buyer of the power that is generated, that is, state distribution companies (discoms). However, developers are wary of state governments actually agreeing to shoulder this additional cost.
Reference- Live Mint, ET, Acme Solar