Solar Manufacturing Scenario of India

solar manufacturing

The incredible growth shown by Indian solar market is un-matching and an important for sector where the country can excel. Initiatives` like International Solar Alliance by India and multiple schemes that benefit the industry have been put in place. If fully harnessed the industry has a strategic importance for the country as it can save upto $20 billion fossil fuels imports annually by 2030.

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. However, everything is not hunky dory in the manufacturing sector of the industry.

The giants like China and US have already dominated the supply chain of the solar products and are moving ahead with vigour and gusto. 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 churning out the material with their respective government fully supporting in almost everything.

Right from the low interest loans and guarantees to capital subsidies, the governments of these countries are supporting the manufacturing companies in acquiring land, R&D and Tax Breaks, 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 par 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 5,286 MW. However, according to Ministry of New and Renewable Energy most of the capacity is sub-scale, obsolete and uncompetitive. This has led to the massive imports of the modules from countries like China, Taiwan and Malaysia.

China takes the lion’s share at 84% of the total 88% of the module imports to the country. Although there are some policies and incentives that central along with state governments are offering to manufacturers but the lack of manufacturing policy is really denting the sector and discouraging the new players to enter in the sector.

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 has to be priority of the government. First let us put together why it is important for government to support the industry.

Although government’s manufacturing policy recognizes solar manufacturing as the industry of ‘strategic importance’ however the vows of manufacturers are not addressed yet. According to the data from 2017 the utilization of Indian made solar equipment is only 21% which forced 40% of the total Indian solar cell manufacturers to shut down.

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 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 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.

The setting up of 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 ‘bigly’.

Similarly, to channelize and streamline the supply chain would be another major booster for the industry. As we know the supply chain is backbone of any industry, not only does it increase efficiency of the production process but also helps in streamlining of the products.

According to FICC ‘the key elements in the solar energy supply chain framework consists of raw material/component suppliers to solar photovoltaic module and solar thermal system manufacturing, balance of system which includes inverters, connecting wires, trackers etc. and the integration of the different components. It is important to have different equipment and components integrated with proper specification and compatibility, as in some cases even slight variation results in failure or loss of final output.’ Thus it is important to secure the supply chain for better productivity.

Furthermore, it should be legally binding for developers to procure at least half of their material from local manufacturers. It would not only help the local market to grow but will also help in competing with the other players in the market.

Having said that there should be aggressive push for separate solar policies and their effective implantation, otherwise, there will always remain a gap between having policies and implementing them effectively.

To help personalise content, tailor your experience and help us improve our services, saurenergy.com uses cookies.
By navigating our site, you agree to allow us to use cookies, in accordance with our Privacy Policy.

      SUBSCRIBE NEWS LETTER
Scroll