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India’s Solar Dependence Risk on China Materializes with the Coronavirus Epidemic

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The Indian solar industry has been growing by leaps and bounds in the last five years, thanks to the falling prices of solar panels and supportive government policies. The falling prices have mainly been driven by cheap Chinese solar equipment imports which have led power prices sourced from solar energy falling to as low as 4 cents/kWh which is lower than that of fossil fuel sources such as coal. Though India has been trying to support domestic manufacturing, it has not nearly done enough and with the lack of a cohesive policy and roadmap, the domestic solar developers are mostly dependent on imports.

solar panels india

Even though there are some solar panel assemblers in India, they depend even on basic stuff such as aluminum frames and glass on Chinese suppliers. With the coronavirus bringing large parts of China to a complete halt, the Indian importers and distributors are facing huge uncertainty. Even solar inverters are imported in large volumes from China making the whole supply chain at risk of complete collapse. With India having even more ambitious targets for solar energy which implies a 4x increase in capacity over the next three years, these targets will become a complete joke if the coronavirus epidemic does not abate in China over the next 2-3 months.

Prices of solar panels from other countries in SE Asia have already increased by 20-30% as no Chinese company with operations out of China is committing to supply orders from Indian companies. The almost complete dependence of the Indian solar industry on China is coming to bite the industry in a big way.  Though the Indian government has belatedly tried to boost the domestic solar manufacturing industry through procurement linked manufacturing tenders and safeguard duties, these initiatives will take time to show results. Even if they do, the upstream part of the supply chain is completely absent in India and there is no future to build those parts. Indian solar cell companies are few and import all the solar wafers which are the main raw material. There are no plans by the Indian government on how it will be able to resolve this issue if this crisis prolongs as there are no other major global suppliers of these kinds of raw material apart from China.


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

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