5 Reasons Why India’s Solar Exporters Deserve More Credit

One of the strangest accusations you will hear against Indian manufacturers, is the one about them exporting solar modules when there is a ‘shortage’ in India. Or worse, about them exporting modules even as they ask for ‘protection’ from imports in India. With exports set to surge to 3 GW and beyond in FY24, this is as good a time as any to bust some myths around exports from India, and highlight why they are actually seen as more than just a little extra margin by India’s leading module manufacturers.

Exports and Perception. The marketing tool to beat all tools in India.

Perhaps the most underrated benefit of exports. In fact, it is amazing how little top Indian exporters highlight their exports, considering the tremendous positive association with exports to developed countries from India. With reasonable skepticism around domestic certification and approvals, successful exports to countries like the US and even Europe, the former the leading destination for Indian solar exports, are probably the strongest marketing tool for a domestic audience.  Not only do our solar manufacturers compete with the world’s best in these markets, but they have also build up a strong record of repeat orders, reinforcing India’s emergence as a manufacturing base like nothing else.

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Exports mean lower costs.

Many people may still be missing it, but India’s manufacturing base remains module heavy, with barely 6 GW of operational cell manufacturing capacity. There is almost no wafer manufacturing, or polysilicon making capacity, the other parts of the upstream cycle for module making. That means, most manufacturers incur a significant import cost, and expense in USD usually, which can be best hedged by exporting after value addition. Not only do the exports act as a natural hedge, this ends up lowering costs, eventually helping all customers, foreign or domestic.

Exports mean margin improvement, hence a more sustainable business.

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It is no secret that for all the hype, domestic consumption of solar has lagged behind projections. That means many manufacturers who invested in hopes of seeing a domestic demand boom, have been disappointed. Exports for them have come as a lifeline, improving margins as well as helping make their business more sustainable. Keep in mind that ever changing technological changes mean manufacturers ideally need to sweat their assets for three years to recover investments, before the next round of investments are made to upgrade or change. All this, when manufacturing plants have to run ideally at 80% capacity. India’s domestic market so far has simply not provided that sort of demand or margins. Consider the fact that with a solar target of 100 GW by 2022, we are still at under 75 GW in 2024.

Exports Open up other opportunities

Speaking of margins, exports have also played a critical role in taking Indian firms beyond the margins to larger solar opportunities. Exposure to developed markets has meant adopting better manufacturing practices, preparing ambitious players for a much larger share of the global market. India remains best placed globally to fill any market share ceded by China, thanks to it’s advantages of a strong domestic market, skilled personnel with experience of solar, and of course, the entrepreneurial nous to build on every opportunity offered.

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Green Jobs

Finally, we have the most obvious reason we should be celebrating exports. Jobs. Not only to manufacturing jobs matter to India today, but solar exports are opening up more opportunities in the EPC and other related sectors. Some industry estimates have projected an opportunity worth over 75,000 jobs overseas, if relevant markets were to allow trained Indian workers to move in the solar sector. Countries like Germany and others, with a firm commitment to solar capacity deployment, are facing huge delays due to lack of skilled personnel. Thus, what we should be doing is training or retraining our  workers to take advantage of these opportunities, which are bound to open up, sooner than later.