India to expand Solar Panel capacity

Indian solar panel manufacturers are reportedly planning to expand capacity. The large ones such as Waaree Solar, Vikram Solar and Tata Solar all are in the process of or in the advanced stages of increasing panel and cell capacity. The Adani Group will become the largest manufacturer soon when it opens its 1.2 GW solar panel and cell factory. What I am unable to understand is what are these guys smoking, when they want to expand capacity. Sure the Indian market is growing but these guys are nowhwere near in competing with imports from China and Taiwan.

There is at least a 10% differential in prices between China and Indian panel manufacturers. Also note that this 10% differential would be much larger, if these Indian players would have been making the poly and wafers in India. With solar panel prices touching 40 cents/watt internationally, there is no way in hell that the Indian players can compete with the global giants such as Trina Solar and Canadian Solar. The Chinese companies have reportedly captured 70% of the Indian market and the share is set to increase with more than a hundred small Chinese companies also looking to enter the Indian market, since it is set to become the 2^nd to 3^rd largest solar market in the world.

Also read Canadian Solar becomes the latest solar panel maker to cut Solar Panel expansion on overcapacity fears.

If I was a solar panel manufacturer, I would be thinking of selling and running away rather than competing with Chinese giants who are willing to sell for years at a loss in order to capture a market. For Indian companies going deeper into the value chain means making cells using imported German equipment. This will get them nowhere since the Chinese equipment makers are already making equipment at a far lower cost. While it is laudable that these companies are thinking of doing more than plain assembly of cells, which any Tom, Dick and Harry can do. There are hundreds of small African and Chinese companies who do this, I am not sure how cost competitive they will be. To be a truly global manufacture, you need an integrated value chain which India companies do not have.

I don’t know what the CEO’s of these companies are thinking, while making plans to expand. Given the large number of headwinds, I would thinking of bunkering down and survive, rather than expand capacity as most of the global leaders like First Solar and Sunpower are doing.

Leading Indian solar module manufacturers have said they are expanding capacities.Kolkata-based Vikram Solar is spending ?400 crore in raising its capacity from 500 MW to 1 GW by November, and then to 2 GW by 2019. The company is buying the equipment required for manufacturing from Teamtecknik of Germany.In addition, Vikram Solar will invest another ?150 crore in putting up a cell manufacturing facility, the company’s President and CTO, Ivan Saha, told BusinessLine at the REI 2016 conference-cum-expo in Delhi, last week.The company intends to go “further in the value chain” later, he said, noting that the company’s investments have been approved for grants under the government’s M-SIPS (modified special incentive package scheme).Mumbai-based Waaree Energies also is doubling its module capacity to 1 GW. The company’s CEO, Sunil Rathi, said the expanded facility would be production-ready by the year end.

Hindu