Indian Solar PV Manufacturing Conundrum

Published on 11th July 2018

A prominent presence in the industry, Indian Solar Manufacturers Association, representing 23 Indian manufacturers of Solar PV including Jupiter Solar Power Ltd. and Tata Power Solar Pvt. Ltd., has long complained about China’s aggressive tactics in the World Solar PV market. 


The association claims that the Indian Solar manufacturing industry has been a victim of dumping of cells and modules in Indian and World markets. 


Analyzing trade data reveals that a majority of Indian imports of Solar PV module (whether assembled or not) come from China. India’s imports of Solar PV modules exploded in 2015 going from USD 593 million in 2014 to USD 1.74 billion in 2015. India’s imports of Solar PV peaked in 2017 when it crossed USD 4 billion—of which China was the source of USD 3.6 billion worth of modules. 


This problem stemming from China’s dumping of below-cost cells and modules is not new at all. In the first decade of this millennium, the Solar PV manufacturers in the US and the EU faced strong competition from new entrants in China backed by the Central and Provincial governments through direct and indirect subsidies. The Clean Tech industry in the US, as a result, suffered a major setback leaving only a few players in the industry unscathed. 


The problems faced by Indian Solar Manufacturers likewise originate from Chinese subsidies to its Solar PV industry in various forms persisting the anti-competitive policy of dumping in large-scale throughout the major world markets. 


For Indian Solar PV manufacturing industry, in the past, support from the Indian government came in the form of DCR mandate for selected solar projects but that policy was struck down by the WTO. 


Today the Association calls for strict implementation of Quality order and technical regulations through third-party inspection and local certification for imports coming into India, and for access to funds and priority sector bank lending for expansion of production.


Despite the protestations of Indian Solar PV manufacturers, the country lacks the manufacturing base for polysilicon, Ingots/wafers, etc. to compete with foreign makers. Lack of integrated setup, economies of scale and higher interest rates point to Indian’s inability to compete on the price point in the Solar PV modules market. 


But herein lies the conundrum. Without adequate, integrated, well-developed manufacturing base for Solar PV, Indian manufacturers of Solar PV cannot beat the Chinese makers in the market. But without the persisting dumping of low-price, large-scale Solar PV modules in India and elsewhere by Chinese makers, the industry in India will not be motivated to invest in expanding the capacity and scale. 


The Ministry of New & Renewable Energy in India has put forth a proposal seeking Expression-of-interest from industry stakeholders to pursue a potential large-scale Solar PV manufacturing park. As of June 2018, the ministry has approved 45 Solar PV manufacturing park projects intending to nurture and build up the industry. 


Even so, the industry in India will face intense pressure at least in the short term from the Chinese makers as the top planning commission in China has scrapped all subsidies indefinitely likely causing inventory buildup and further price decline across the World Solar PV markets. 

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