Bookmark and Share

Why we think India is a Half Dead Solar Manufacturing Industry

3 Comment

The Sorry State of Affairs for the Indian Solar Industry

The Indian Solar Manufacturing Industry is in a very bad shape due to intense competition from China and USA. The badly developed JNNSM federal solar policy led to USA thin film solar panel imports capturing most of the Indian market, during the first phase. A loophole which allowed unrestricted use of thin film solar panels led to the small Indian crystalline solar panel makers being priced out of the market. First Solar (FSLR) dominated the JNNSM market boosted by the low cost vendor financing by the US Exim Bank. The state run solar subsidies especially in Gujarat did not have any domestic content requirements (DCR) which meant that Chinese imports dominated that segment of the market.

Most of the Indian solar manufacturers have been running at very low utilization and large losses. The slowdown for Indian solar manufacturing is coupled with the general Indian manufacturing slowdown as well. Despite the Indian market growing to more than 1000 MW a year, the Indian solar manufacturers have got less than 30% of the local market. JNNSM phase 2 allowed 375 MW of capacity to be sourced from domestic manufactures only. However, in a complaint a solar industry association has said that only 150 MW of the total 800 MW of solar cell capacity in the country is running and even these solar cells are expensive and of poor quality.

India’s industry policy is a mess and the share of Indian manufacturing of the total GDP is declining every year, due to the high cost of capital and rigid and stupid labor laws. The share of manufacturing of India should be much higher, given the current state of development. However, India’s pathetic, corrupt and inept elite have forced most citizens into poor value adding activities like selling fruits on the pavements. Most of the India’s work force is forced to earn their daily bread in the unorganized and contractual sector. The Indian employers are loath to employ workers full time, instead going in for temp agencies who give poor salaries to their temp workers.

India is belatedly trying to revive its dead solar manufactures by giving a 375 MW DCR incentive, however that is unlikely since it has been given up for dead by most people. The Chinese solar panel companies such as Trina Solar (TSL), Yingli (YGE) and others have 3 times the capacity of the entire Indian industry on their own. Competing with such large and huge players will not be easy given the best of conditions. In India’s case, the solar players face the worst of conditions with issues in land procurement, high loan costs, impossible labor regulations, pathetic logistics etc.

Hindu

India-made solar cells are of poor quality, less efficient and more expensive than imported cells, solar power project developers have said in a letter to the government.

They have also said that although cell manufacturers claim they have the capacity to produce more than 800 MW of cells, in reality only about 150 MW is available — as many units are shut either due to financial constraints or because of outdated equipment.

The National Solar Energy Federation of India has sent the letter to the Ministry of New and Renewable Energy and Solar Energy Corporation of India (SECI). The federation is a body of all stakeholders in the solar industry, and includes manufacturers too. SECI is a public sector company recently set up to drive solar power in India.

More on this topic (What's this?)
Verizon Looks to the Sun
How India Evaded The One Bank’s Gold-Embargo
Read more on Solar Power, Investing in India at Wikinvest
PG

Sneha Shah

I am Sneha, the Editor-in-chief for the Blog. We would be glad to receive suggestions, inputs & comments on GWI from you guys to keep it going! You can contact me for consultancy/trade inquires by writing an email to greensneha@yahoo.in or call me on +913340606492.

You might also like:

 

3 Responses so far | Have Your Say!

  1. PRAMOD RANJAN ARORA

    India has the highest potential of solar energy in the world. India has not been able to tap solar energy. Government has not yet developed mechanism to reap the benefits of solar energy. India has a potential of more than 200 GW for solar PV.Therefore, manufacturing capacity is negligible in India. Government should support industry with strong research and development and provide financial assistance to stand globally. We are sourcing costly technology and solar PV.. Importing of costly technology and PV disturb our balance of trade.

  2. Thimmappa Naik

    India still wasting money on Hydro, Nuclear power projects instead of depositing in Solar energy. The Electricity act is not so active and Govt also not providing any beneficiary openly to solar users. But the future India will depend for power only on Solar….

  3. Vineet Mittal

    Dear Ms Sneha,

    Your comments on Indian Industry are very harsh and without substantial data and figures.

    It is agreed that Indian solar manufacturers are not having the biggest capacities, but that has to do with the nascent stage of the sector in India and slowly new and better companies are entering into manufacturing sector.
    Also, the quality of Indian solar panels is appreciated world wide and buyers are ready to pay a premium over Chinese panel rates.

    Anyways, the downstream industry of total commissioning (which is almost half of total solar project cost is majorly led by professional Indian companies like L & T, Sterling Wilson, Tata, etc to name a few)

    So request you to also highlight the good part of Indian solar industry rather than posting your blogs just on one or two negative news.

Leave a Reply