As a result of higher taxes and tariffs, many tenders for new solar projects are either on hold or have been scrapped.
Narendra Modi is on Sunday hosting India’s biggest diplomatic summit in years as he launches a new international body to help finance solar projects and seeks to cement India’s place at the forefront of the global energy revolution.
But even as the Indian prime minister welcomes more than 20 world leaders to New Delhi for the International Solar Alliance conference — designed to help fund solar projects in some of the world’s sunniest and poorest countries — evidence is building that the spectacular growth in the Indian solar market is grinding to a halt.
Experts attribute much of the slowdown to developers worrying about higher taxes being levied by Mr Modi’s government.
Last year, the Indian solar industry was celebrating the fact that a company had bid a record low of just Rs2.44 ($0.04) for every unit of electricity it eventually produces from a solar farm in the northern state of Rajasthan.
But since then, solar companies have been hit by several tax increases.
From last July, developers have had to pay 5 per cent under the new goods and services tax on solar equipment, while some ports are charging an additional 7.5 per cent import duty on panels from abroad.
Regulators are now proposing an “emergency” 70 per cent tariff on solar parts made in China, Malaysia and the west, in a bid to protect the few Indian panel manufacturers. The move follows similar actions by the US and EU.