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Government delays solar panel manufacturing policy

Government delays solar panel manufacturing policy

Government delays solar panel manufacturing policy

Government delays solar panel manufacturing policy

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The government has once again delayed approving a new policy for solar panel manufacturing, caught between promoting solar energy and protecting imported fuel-based power generation.

This uncertainty has adversely affected the investment plans of Sinotec Solar Corporation, a leading US solar panel manufacturer, according to reports.

The company aims to relocate its factory from Thailand and establish an advanced solar panel manufacturing plant for export purposes.

Last week, the Economic Coordination Committee (ECC) of the Cabinet deferred the approval of the solar panel manufacturing policy for 2024, marking the fourth postponement.

This delay contradicts directives to approve the policy to reduce import reliance. Local solar panel manufacturing could save the country up to $900 million annually by localizing more than 50% of the panel value.

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The proposed policy by the Ministry of Industry includes duty and tax exemptions on input materials and machinery used in local manufacturing and increased import duties on finished solar panels to discourage imports.

It outlines a 10-year plan with annual targets for investment, production capacity, exports, and localization. Investors are required to provide bank guarantees equivalent to tariff and tax exemptions, aiming for a gradual increase in production and export percentages with specific localization targets for solar panel parts.

The Ministry of Energy proposes a 10% customs duty on PV modules over the next decade and advocates for duty-free imports of panels for the first two years, opposing the 20% localization target in the initial years.

Incentives are tied to meeting localization and export targets, with provisions for withdrawal and recovery if targets are missed by more than 20%.

Despite aiming to add 10,000 megawatts of solar power by 2031, the government’s approval of the new policy remains uncertain.

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