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How USA’s First Solar hit the Jackpot in India through a Loophole in Solar Subsidy Policy

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US based thin film solar panel manufacturer First Solar has captured the lead marketshare in India’s solar panel market. This is quite surprising since First Solar’s competitive position is being eroded globally by Chinese crystalline solar panels which are cheaper and of higher efficiency. In fact First Solar has mostly stopped selling solar panels because they are no longer competitive. The reason for First Solar’s spectacular success in India is due to India’s solar subsidy policy JNNSM. The policy which was meant to support India’s domestic solar panel companies though a “domestic content” provision has ironically helped First Solar become the undisputed leader in winning most of the JNNSM projects. The reason is that JNNSM excludes thin film solar panels from the domestic content provision which means that solar developers can buy thin film technology from foreign companies. Given that the cost structure and scale of Indian solar manufacturers is clearly no match to that of the global solar companies, First Solar has benefited hugely . The company recently won a 50 MW solar panel supply contract to Kiran and Mahindra Solar companies which won the bid under JNNSM.

Despite talks about making the conditions more stringent and imposition of duties on solar panel imports, nothing has been done till now. Note USA is strongly opposed to this as it knows First Solar will lose an important market where it is still being able to compete

USA opposed India’s domestic content requirements in Solar Energy (in vain)

USA has opposed India’s Local Content Requirements for the Federal Solar Energy JNNSM program. Note according to the JNNSM rules,solar panels will have to be produced in India for the first year and solar cells will also have to produced from the second year. There is also a proposal that the local content requirements may be extended beyond 2013 and will also include solar inverters. US administration is opposed to these rules as it will lead to export hurdles for its solar companies Sunpower and First Solar. India installers and developers have also opposed the move as it will lead to lesser choice amongst suppliers and probably higher costs.

Note India solar cell/module manufacturers are heavily in favor of the domestic content rules as it will be difficult for them to compete with much larger and lower cost Chinese companies. Note China has not protested against these moves as it promoted its Domestic Wind Energy Industry in 2006 through this policy. Ontario, Canada too is following the same policy and has been take to the WTO by Japan. Note USA has not been a party to the Japanese move, as its companies have won large contracts in the region. There are both pros and cons to the domestic content policy for solar energy but one thing is for sure if free imports are allowed, Indian companies are not in a position to compete with the foreign ones on cost.

Indian Solar Panel Manufacturers closing down

Solar Companies around the world are facing hard times with bankruptcies galore. Not only hundreds of small installers, erstwhile behemohts like Q-Cells have defaulted on debt and declared bankruptcy. So its not a great surprise that Indian solar companies which were never very competitive anyway are facing equally bad times. The biggest and oldest solar panel companies like Moser Baer and Tata BP Solar are facing survival questions. These companies have seen departure of top executives and are looking for CDR resolutions. Moser Baer which had invested hundreds of millions in investments into crystalline silicon and thin film solar is having difficulty in paying back its debt. The stock price has cratered to almost nothing as well. The company which had invested into exotic solar technologies as well as the mainstream has managed to fail everywhere. The company had even invested in a polysilicon startup as well as concentrated solar power technologies. It shut down its thin film equipment plant a year ago as Applied Materials the equipment supplier itself got out of the business. The company is now mainly into the EPC business. Other companies like Indosolar are also looking like a write-off. When the biggest solar panel companies like Suntech are themselves in such trouble, it is a surprise that these companies are managing to produce anything at all.

Read more about the JNNSM.


First Solar today said it has completed the agreements with Kiran Energy Solar Power and Mahindra Solar One for supplying its advanced thin-film solar modules for solar projects of the two companies in Rajasthan.

“First Solar, Kiran Energy Solar Power and Mahindra Solar One have completed an agreement for the supply of former’s advanced, thin-film solar modules for two solar photovoltaic (PV) power plants totalling 50 MW in Rajasthan,” the company said in a statement.

Kiran Energy and Mahindra Solar One, a joint venture between Kiran Energy and Mahindra, are developing 20 mw and 30 mw solar projects, respectively, in Rajasthan under the second batch of the first phase of the national solar mission (NSM).


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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