The recent Vibrant Gujarat Summit saw the announcement by SunEdison and Adani Group that they would collaborate in setting up an integrated PV solar panels manufacturing plant in Kutch district in the western most part of the country. It will be a $4 billion investment with parts of the integrated plant coming up before other parts. I think this means that they will try to build the cell and module parts of the plant before the wafer and poly parts of the plant. Normally poly takes almost 3-4 years to get built and the JV would want to build the cell and module components first to take advantage of the DCR part of the India’s federal solar policy.

Note SunEdison (SUNE) is one of the leading technology providers in the solar industry. They recently signed a similar deal to provide technology in a JV with a Saudi Arabian fund. While SunEdison does not make cell and modules, it has poly and wafer manufacturing. The company now mainly concentrate on developing solar plants around the world and makes solar components through JVs with other companies like JA Solar and Foxconn. It has also not announced aggressive expansion in wafers and poly, where the Chinese are dominant. However, SunEdison does have good technology in solar manufacturing and recently claimed that improvement in poly technology would allow it to make solar panels with a 40c/watt cost by 2016.

The Adani Group are one of the biggest industrial groups with their base in Gujarat. They run the highly successful Mundhra port in the Kutch district. They could provide the land and other facilities like cheap power and transportation to the JV. The combination of the Adanis and SunEdison seems good.

The Indian demand is set to zoom upto 5 GW a year, in the next 4-5 years and 10 GW in the next 10 years. India’s domestic manufacturing capacity is mainly concentrated on low value adding modules with no poly and wafer manufacturing. With both the Indian central and state governments heavily supporting domestic manufacturing and given large incentives, it seems a good idea from both the demand and supply side to build a large solar manufacturing facility. Both the companies have the expertise and large balance sheet sizes to meet the growing needs of solar power in India. The companies are doing a feasibility study, which they will complete in the next 6 months. The first parts should start by 2016 and 2017.