Solar Exports From India to USA Will Keep Rising Till 2025: IEEFA

By Saur News Bureau/ Updated On Mon, Oct 30th, 2023

Highlights :

It adds that following the implementation of the Inflation Reduction Act (IRA) in the U.S. and the Green Deal in the European Union (EU), establishing domestic solar PV manufacturing lines catering to their needs will take two to three years. But, once their domestic manufacturing develops, Indian exports will start declining.

Solar Exports From India to USA Will Keep Rising Till 2025: IEEFA

A study by the Institute for Energy Economics and Financial Analysis (IEEFA) states that India’s solar photovoltaic (PV) module exports to the United States of America (the U.S.) are likely to keep rising for another couple of years before stagnating from 2025 and declining from 2027. It adds that following the implementation of the Inflation Reduction Act (IRA) in the U.S. and the Green Deal in the European Union (EU), establishing domestic solar PV manufacturing lines catering to their needs will take two to three years. But, once their domestic manufacturing develops, Indian exports will start declining.

“With annual global solar installations forecast to reach at least 1 terawatt (TW) by 2030, it is clear that there will be no dearth of PV demand in the future. Thus, Indian manufacturers must focus equally on domestic and international markets. Companies Indian PV products will also need to compete in global markets with other large PV manufacturing countries in terms of quality and scale,” says the report’s co-author, Vibhuti Garg, Director, South Asia, IEEFA.

The report notes that PV module exports from India to the U.S. have increased exponentially in the fiscal year (FY) 2023 (16x from FY2022 by value).

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Based on public announcements, the report assesses that the IRA will help add 50 gigawatts (GW) of module manufacturing capacity in the U.S. while the Green Deal will help add 31 GW of module manufacturing capacity in the EU.

A major factor that has pushed the US to choosing India for imports over China is the restrictions that the US has imposed on imports from China, whose reputation has suffered with the exploitation of the Uyghur Forced Labor. The USA’s UFLPA’s import control provisions have put serious curbs on permitting imports from China, especially polysilicon and solar panels. Thus, the USA is now looking towards India to help with its requirements. Following USA, Indian manufacturers are also exporting proactively to Europe, which, much like USA, is curbing imports from China and witnessing a solar capacity boom.