India’s solar manufacturing lags the major global players, notwithstanding being one of the largest markets for solar applications in terms of size and technology. Moreover, even though the Indian government encourages local solar manufacturing, investment activity is still limited. As a result, imported modules are perhaps the most bankable when it comes to considerations for module bankability, whether it is quality, brand, or price.
According to an article written in the energy world, the cumulative amount of the country’s solar imports in FY17, FY18, and FY19 were $3,196.5 million, $3,837.6 million, and $2,159.7 million, respectively. Around 85% of solar cells and modules are supplied by Chinese companies to India.
Manufacturers of solar power generation equipment in India face a problematic situation due to high import duties on raw materials and the high cost of shipping, making it impossible to increase manufacturing in the region. Moreover, with such a large percentage of India’s solar panels and modules imported from China, an increase in prices has worried developers. The debate over whether to build tariff walls to allow India’s manufacturing industry to grow behind them, or to enable Indian solar energy companies to profit from low-cost imports of modules, has raged for years.
This year, on another side, has also seen a renewed drive for domestic manufacturing in India’s solar industry to reduce the country’s reliance on imports. However, the COVID-19 disrupting global supply chains created a severe market shock, according to Du & Bradstreet, which has offset the Indian economy’s positive signs of growth that were apparent towards early 2021, affecting the module market. And, while there was an attempt to weather the impact of the first covid wave with the assistance of emergency cost cuts, the advent of the second wave has forced the Indian manufacturers to tighten their belts even further.
The impending crisis has undoubtedly emerged as a wake-up call for the solar PV sector, emphasizing our dependence on “imports.” Therefore, our government has high time to bring practical proposals to construct new made-in-India manufacturing facilities for PV modules and energy storage. This will not only alleviate reliance on imports but will also result in the creation of jobs.