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Published:Thursday, October 18, 2018 4:09 PM

Domestic Solar Manufacturing – Need of the Hour to Focus

Infraline Energy

Indian solar market is showing incredible growth and it is very important for achieving India’s renewable energy target. With increasing installed capacity of India solar panel import also increased. Import from countries like China, Malaysia affecting Indian solar panel manufacturing industry. India has an estimated solar potential of 749 GW which can create millions of jobs. Similarly, the manufacturing sector of the industry has a potential of creating 50,000 direct and 125,000 jobs in next 5 years and at the same time it can save the country with USD 42 billion in equipment imports by 2030.

China and Malaysia are dominating the market of solar manufacturing. India is lacking behind massively in the field due to various reasons. Manufacturing companies of the countries like China, US, Taiwan and Malaysia are aggressively capturing the market in the India. The governments of these countries are supporting the manufacturing companies in acquiring land, R&D, Tax Breaks and Right from the low interest loans and guarantees to capital subsidies, which unfortunately is not the case in India.

India has indeed a huge potential in the sector but it is important for the country to match or be at compete with the global players. However, the current scenario of module manufacturing in India is not quite impressive. The total module manufacturing capacity of the country is 7,007 MW. Among all Indian manufacturers most of the capacity is sub-scale, obsolete, costly and uncompetitive. This has led to the massive imports of the modules from countries like China, Taiwan and Malaysia.

It is really important for the government to give special attention to the sector. Given the fact that India relies on imports, the local manufacturing must be priority of the government. Government impose a safeguard duty on the imported panels but there is no commitment and announcement from the top manufacturers in India with expansion in existing capacity or new units.

The industry suffered because of global over-supply of the equipment in the market. Not only Indian companies but some of the overseas giants have also suffered loses. One of the leading solar power equipment manufacturer Indosolar has declared loss of Rs 330 crore in last couple of years. Similarly, companies like Moser Baer which manufacturers solar cells had posted its loss at Rs, 3800 crore.

The story for loss of Tata BP Solar, Lanco Solar, HHV Solar Technologies, Jupiter Solar, WebSol Energy Systems and others is no different. Almost all of these companies have sharply reduced their production capacity.

Similarly, there are companies like Oderdun, a German based company that manufactures thin-film and Solyndra, a US based manufacturer have declared bankruptcy. At the same time those still standing their feet are selling their products very cheaply. The Chinese manufacturers are however not in trouble, given the fact that the government has put $40 billion in the industry.

Although the future for manufacturing of solar equipment in India looks bleak, there is a hope in some fields like battery manufacturing industry. A ray of hope was seen when in April Minister for Power, Mr. R K Singh hold a meeting with battery manufacturers for incentivizing battery manufacturing in India.

The meeting was attended, along with Ministry officials, by Indian Space Research Organisation (ISRO), Ministry of Electronics and Information Technology (MEITY) and NITI Aayog and executives form the battery manufacturing firms.

Reportedly Singh said to manufacturers that demand in near future is going to be very high, thus manufacturers need to set-up manufacturing units in India. He also said all the solar auction in future should be linked with manufacturing capacity. He also asserted that the bids in future will be for solar-wind hybrid along with storage. He assured that the government will soon come out with the policy that will benefit the manufacturers in the country. But recently deadline of SECI’s Tender for 10 GW solar Capacity Linked with 3 GW Manufacturing capacity extended third time due to poor response of Indian solar players.

The setting up of solar manufacturing units in the country is not the only call from the government, the concerns related to the non-availability of raw materials for battery manufacturing was also addressed. The minister said that the government has already started approaching resources-rich countries like Bolivia.

Currently India imports almost all of the battery components, except battery packs, from countries like China, South Korea and Malaysia. ‘We need to develop indigenous production capabilities for lithium-ion batteries’ said secretary in the department of Heavy industry Girish Shankar in one of the conclaves held in New Delhi earlier this year.

In the overall scenario there are some early steps which government can take to boost the local manufacturing industry. First and foremost is to incentivize new technology. The adaptation of new technology will not on reduce cost of the products but also will make solar affordable to the end consumers. In China the National Energy Administration (NEA) run a successful program called “Top Runner Program” which has been setup to create the market for advanced technologies. A similar kind of program in the country can help manufacturers in India.

More aggressive push like safeguard duty is required for Indian solar industry could it be in form of incentives, special schemes, policies related to manufacturing of solar panels and equipment by keeping other aspects of development also in mind.

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