Viability Assessment of New Domestic Solar Module Manufacturing Units<\/a>, finds current production capacity in India is only able to meet 35% of total annual domestic demand.<\/p>\n\n\n\nCo-written by IEEFA\u2019s Vibhuti Garg and JMK\u2019s Jyoti Gulia and co, the report seeks to explain why India is lagging, and what can be done to increase India\u2019s energy security while accelerating its ambitious target to reach 450 gigawatts of renewables by 2030. <\/p>\n\n\n\n
\u201cWe found capacity utilisation rates of solar module domestic production facilities in India running at only 40-45% and estimated operational capacity of only about 7 gigawatts, despite having an installed domestic PV module manufacturing capacity of about 15 gigawatts,\u201d says Garg.<\/p>\n\n\n\n
\u201cClearly India has the capacity to do much better.\u201d<\/p>\n\n\n\n
China is out-performing India in a number of areas, in both manufacturing and research and development.<\/p>\n\n\n\n
\u201cChina utilizes between 1-3% of gross revenue for solar module R&D every year. In contrast, India\u2019s leading players provide little R&D investment\u201d \u201d said Gulia. \u201c<\/p>\n\n\n\n
The report found that in terms of profit margins, Chinese module suppliers are able to absorb larger shares of profit (on average 4.3%) from operational revenues compared to Indian suppliers who earn an average profit income of less than 3%.\u00a0<\/p>\n\n\n\n
\u201cThis is because Chinese module manufacturers have larger-scale production facilities and a low dependence on imports.<\/p>\n\n\n\n
\u201cChina also has completely integrated facilities producing modules, cells and wafers complemented by robust R&D and favourable government support,\u201d \u201d said Gulia. <\/p>\n\n\n\n
In terms of technology adoption trends, China\u2019s more advanced mono-Si PV modules were reaching two-thirds of the share of the entire global PV production chain in 2019 by gigawatt volume.<\/p>\n\n\n\n
\u201cWhen we compared that to the top 7 Indian domestic module manufacturers in 2019, mono-Si PV modules constituted only 13% of PV production, while 87% comprised of multi-crystalline (or multi-Si) PV modules.<\/p>\n\n\n\n
Keeping abreast of technological innovations in the current energy transition towards renewables must be the highest priority,\u201d \u201d noted Gulia.<\/p>\n\n\n\n
The report notes many Indian solar module manufacturers have announced plans to expand existing facilities.<\/p>\n\n\n\n
\u201cThere are also a lot of players keen on setting up completely new integrated facilities.<\/p>\n\n\n\n
While ambition is commendable, these players will face stiff competition from leading global players. Chinese firms\u2019 aggressive capacity expansion coupled with consistent and ongoing technological advancements are yielding PV cells and modules of superior efficiency while still being cost-effective,” said Garg.<\/p>\n\n\n\n
Gulia noted\u00a0the government has a role to play in defining the passage of solar manufacturing going forward.<\/p>\n\n\n\n
\u201cCentral government needs to provide a balanced manufacturing framework nestled in a long term strategy to assist domestic players to compete in the global field.<\/p>\n\n\n\n
While only a short term solution to boost the local market, the imposition of safeguard and basic custom duties designed to increase the price of imported modules will assist domestic manufacturers,” She went on to say.<\/p>\n\n\n\n
\u201cAny planned initiatives should not be limited to this, however. The focus should also be on helping manufacturers become globally competitive.\u201d<\/p>\n\n\n\n
Meanwhile, Garg pointed out that energy security is a key concern for India and investing locally in the solar module sector is one of the pathways towards achieving that.<\/p>\n\n\n\n
\u201cA self-reliant solar sector would not only cater to domestic demand but would also open new avenues of exports, especially after the COVID-19 supply chain shock that has forced numerous countries to look elsewhere for alternatives to China\u2019s goods.<\/p>\n\n\n\n
India could meet those global solar PV needs, with the right government support behind the sector,\u201d he said.<\/p>\n","protected":false},"excerpt":{"rendered":"
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