Could a $3.1 billion Modi's "Prayas" boost Solar Manufacturing in India

$3.1 billion fund to aid Solar Manufacturing in India

We at Greenworldinvestor have been covering solar development in India since some time now. The country has come a long way by raising its solar installation target to 100 GW by 2022. PM Modi has been playing an instrumental dream helping India realize its dreams. However the Indian solar manufacturing capacity is not in line with its ambitious target. Moreover the country’s recent defeat in the WTO case also works against its domestic content requirements.

As per the country’s data India exports almost 70% of its solar components from China. In an article few days back, I had mentioned why India panel manufacturers could not succeed in expanding their manufacturing capacities, mostly because of tough competition from China. According to Bloomberg New Energy Finance, the country imported solar products worth more than $1 billion from China in the first half of 2016 itself.

In an attempt to further boost manufacturing in the country, Prime Minister Modi is planning another $3.1 billion investment for the Indian solar factories. India needs funds worth more than $200 billion to help achieve its target. The Central government has come up with a plan called “Pradhan Mantri Yojana for Augmenting Solar Manufacturing” which will aim at increasing the manufacturing capacity to support not only the national demand, but also help in exports. This initiative is expected to create 5 GW of manufacturing capacity from 2019 and install 20 GW of projects by 2026. Solar investments in India witnessed a growth of 80%, becoming the largest renewable energy sector in the country. Many large foreign conglomerates have shown interest in India and have promised/ invested huge funds.

Though it is a good move by the Indian government in my opinion, the domestic manufacturers need to become more competent than their Chinese counterparts in order to succeed and survive. Any help from the government could boost the spirits of Indian manufacturers. India is a growing solar market and today everyone is aware of the advantages of using solar technology. But it is sad that India which has such a huge availability of cheap resources like labor, resorts to importing a majority of its requirement. If India succeeds in building a decent manufacturing capacity in order to combat the Chinese foe, the situation would be so different. We need to start somewhere and at some point of time and I am glad what the PM has come up with. In addition it will create more employment opportunities for the youth in India.