Environmental Groups Remonstrate Against U.S. Challenge of India’s Solar Domestic Content Rules

A dozen environmental groups on Wednesday called on the U.S. Trade Representative to reconsider a World Trade Organization (WTO) challenge to domestic content rules and subsidies in India’s national solar program, urging it instead to agree to a solution that allows India to support and build its domestic solar industry.

Groups that include the Sierra Club, the Institute for Policy Studies, the Center for Food Safety, and ActionAid USA said in a letter to Ambassador Demetrios Marantis, acting U.S. Trade Representative, that they were deeply concerned by the case. "Challenging this program undercuts India’s efforts to pursue appropriate economic development and reduce poverty and to take urgently needed steps to tackle the pressing and shared challenge of climate change," they said.

While it was critical to support and build a U.S. solar industry, "the development of our solar industry should not come at the expense of India’s ability to develop its solar industry." the groups said.

India’s ability to grow a domestic solar industry is critical because the development of a viable domestic renewable energy industry is a way to increase the share of the energy market available to renewable energy, the groups said. India’s available energy market financing was currently dedicated to fossil fuels, and domestic content rules could play an important role in helping the developing country diversify its energy portfolio and tackle climate change, they alleged.

"We are troubled that climate policy may increasingly be determined by the WTO and similar arenas based on unfair or inappropriate trade law, rather than on climate science and the real-world necessities of building a green economy," the groups said.

The U.S. in February called for WTO consultations to settle a dispute in which it alleges India’s national solar program appears to discriminate against U.S. solar equipment makers by requiring solar energy producers in the South Asian country to use Indian-made solar cells and modules.

India launched its national solar policy, the Jawaharlal Nehru National Solar Mission (JNNSM), in January 2010. Under the first part, the country required developers of solar photovoltaic (PV) projects employing crystalline silicon technology to use solar modules manufactured in India, the U.S. alleges. India expanded this domestic sourcing requirement to crystalline silicon solar cells in the second part of JNNSM as well, it says. "India also offers solar energy developers participating in the JNNSM a guarantee that the government will purchase a certain amount of solar power at a highly subsidized tariff rate, provided that they use domestically manufactured solar equipment instead of imports."

The trade representative’s proceedings against India have been backed by the Solar Energy Industries Association (SEIA), a U.S. solar industry group. SEIA last week reported that the U.S. domestic solar market had its best year in 2012, with growth in installations outpacing that of the global market. The growth was driven by an oversupply of cheaper panels from China, whose domestic content policies the U.S. is currently also challenging at the WTO.

"We’re teetering on the edge of a climate tipping point, and we must invest in clean energy now–not only in the U.S., but globally," said Sierra Club Trade Representative Ilana Solomon on Wednesday. "Instead of attempting to thwart India’s solar innovation, the Office of the United States Trade Representative should support India’s efforts to develop a domestic solar industry, just as we must do at home.”

Sources: POWERnews, the Sierra Club, USTR

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