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India is gearing up to achieve 100 GW of solar power generation capacity by as early as the end of 2017, but with inflow of cheap solar panels/cells from China, the domestic solar panel producers stand to gain little
As soon as a solar panel installer gets an order to set up a solar rooftop system in any of the Indian cities, they dial a Chinese company for the panels to be shipped to India. Despite the distance and logistics, the panels are far cheaper – with a difference of Rs.5 to Rs.6 per panel, compared to those available domestically. It takes about 30 to 45 days for the consignment to be delivered but the solar panel import is moving on a quick pace, especially from China.
Chinese Panels dominate:
India is largely dependent on China for its solar cells and modules imports. In the financial year 2015-16, the value of imported solar panel, cells and modules tripled to $2.34 billion and of the total import, China alone accounted for 83 per cent, with a value of $1.9 billion of the total.
In 2014-15, India’s solar imports amounted to $821 million; China’s share was 73 per cent. China has gained share in a growing market.
The only other country whose exports to India touched a three-digit number was Malaysia. India imported solar cells and modules worth $189 million from the country in 2015-16, up from $83 million in the previous year.
The US-based First Solar, which is one of the largest suppliers to India, has a plant in Malaysia (Solar cells are processed into modules). Last year saw record solar installations of 3,018 MW in India, which took the country’s cumulative solar capacity to 6,762 MW by the year end (over 7,500 MW as of now). In the current year, India is expected to add at least 5,000 MW.
Cheapest and cost effective:
Despite the distance and the cumbersome logistics requirement, it is way more than cheap to a solar panel installer to import from China, considering the pricing in the Indian market. After completing the entire installation of the panels there will be a difference of Rs.5 to Rs.6 per panel – than what a manufacturer in any of the cities or any other part of the country would quote.
This is the case with solar cells too. While it would cost Rs.22 to Rs.30 per watt for an Indian made solar cell, it would only cost half of the amount to spend on a Chinese made solar cell – for Chinese cells it would only cost Rs.10 to Rs.17 per watt. In the case of solar panels, an Indian panel would cost around Rs.36 per watt, whereas for Chinese it would only cost Rs.30.
Indian Manufacturers cry foul:
A solar cell manufacturing company based out of Delhi that has its factory in Andhra Pradesh has stopped making cells altogether. “We have the same technology. In fact, our products are of superior quality but the government has put no checks on imports. I read with great interest Delhi’s draft solar policy – of installing 2 GW by 2025 – but will it all be with imported panels? We have represented government our concerns,” said Arun Mishra, member of the Solar Energy Society of India and vice president of a solar manufacturing units.
Despite the constant demand of the Indian manufactures to impose anti-dumping duty on solar panel and cell imports, the central government hasn’t yielded to their plea so far. Since the lowest bidder gets almost all government projects, those who are depending on China for the modules and cells get a better edge for getting different solar power project and this has been the major concerns for the solar manufactures in India.
“We, as developers, and even state governments will opt for the lowest bidder. Indian manufacturers are expensive. It will take a long time to bridge this gap,” said a manufacturer currently developing rooftop projects on government buildings in Delhi.
Export:
Interestingly, in contrast to the growth in imports, India’s exports of solar cells and modules rose modestly to $171 million in this year compared with $168 million in the previous year.
The US, which bought $60 million worth of Indian solar products, accounted for a meagre $7.83 million. The UK was the largest buyer of Indian products in 2015-16, with purchases worth $108 million, compared with $ 46 million previously.
The apparent reason for the import boom:
In 2014, India’s Prime Minister Narendra Modi announced a goal to increase solar power capacity to 100 gigawatts (GW) by 2022 – five times higher than the previous target. The 2022 target is extremely ambitious (the world’s total installed solar power capacity was181 GW in 2014) and would make India a global leader in renewable energy. Moreover, Piyush Goyal, India’s Minister of State (IC) for Power, Coal and New & Renewable Energy, recently said that India aims to achieve its 100 GW solar target as early as the end of 2017.
According to statistics, solar power is developing rapidly in India and as of May 31, 2016, the cumulative installed grid connected solar power capacity was 7,568 MW and the proposed target is 100,000 MW by 2022. India is ranked number one in terms of solar electricity production per watt installed, with an insolation of 1,700 to 1,900 kilowatt hours per kilowatt peak (kWh/KWp). In January 2015, the Indian government significantly expanded its solar plans, targeting $100 billion of investment and 100 GW of solar capacity (including 40,000 MW from rooftop solar) by 2022.
As part of Central Government’s green energy push, India will award contracts for the supply of 15,000 MW this year also, which indicates that the import will further go up as no quick turnaround in the solar cell or module manufacturing is unlikely.
According to the plan, Solar Energy Corp. of India (SECI) will shortly call for bids from developers for buying 2,000 MW, a government official said, requesting anonymity.
The procurement will be done through a reverse bidding process, and it will provide a purchase guarantee, making such projects bankable and help solar power eventually cost the same as that purchased from the grid.
Logistics:
While the country is getting the lion’s share of solar panels from China, Malaysia and Taiwan, three bigger ports in the country gets all the shipment. Jawaharlal Nehru Port, Mumbai, Chennai Port and Mundra in Gujarat handle almost all solar shipment bound to the country.
According to Sharmila Amin, Managing Director South Asia at Bertling Logistics India Private Ltd, almost 50 per cent of the total solar import happens through JNPT, Mumbai and both Chennai and Mundra ports account for 25 per cent each.
Though these three ports account for almost all solar panel, cell imports, the project promoters depend on other ports closer to the project locations.
One of the biggest power plants of Adani Power Pvt.Ltd has been set up at Kamuthi, Ramananthapuram, Tamil Nadu and the project location is just 100 km from the Tuticorin Port. For the 740 MW mega power plant, all required solar panels and cells were shipped through Tuticorin Port. According to David Raja, Vice President, St. Johns ICD Tuticorin, almost all project equipement for the Kamuthi Solar Power Plant was shipped through Tuticorin Port. “In December 2015, we shipped 6,000 containers of solar panels and cells to the Kamuthi Solar Power Plant. The shipment was from China and we got the consignment shipped via Colombo to Tuticorin and from here we delivered it to Kamuthi via road,” says David Raja.
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