India needs energy security and sustainable energy solutions. The country’s solar market is on a roll with over 30 GW of large-scale solar PV capacity and almost 4.5 GW of rooftop solar capacity installed as of December 2019. It is set for a 40-50% growth rate over the next five years once grid-installation bottlenecks are overcome. The country has also recorded historically low tariffs of solar PV but the domestic manufacturing of solar cells and modules is yet to attain critical mass.
Due to this fact, India has always been heavily dependent on Chinese imports. However, the imposition of work restrictions in China due to the COVID-19 outbreak has affected many provinces that are hubs for solar module manufacturers. This has led to severe impacts on installations in India due to the shortages of raw materials needed for the completion of projects in the first half of the year. Currently, as much as 80% of the demand for solar cells and modules are being met by imports from Chinese companies. The country’s domestic installed manufacturing capacity of cells is about 3.1 GW (around 18 companies) and that of modules is about 11 GW (nearly 175 companies).
While only a couple of these companies are of the GW scale, a majority of them are of 50-200 MW capacity and have very high operational costs. If this dependence on imports continues, not only will installations be affected, but the future of energy security will be at risk as well. This issue was recently addressed by the energy secretary of the Ministry of New and Renewable Energy (MNRE) at a webinar organised by Mercom India.
“We plan to bring out a new scheme which would further advance and aid manufacturing in India. We have sought suggestions from stakeholders and we have also written to state governments and ports to provide land for setting up the manufacturer sites.”Anand Kumar
Apart from domestic PV manufacturing, the MNRE also stated that once these manufacturing hubs are set up, they will not only manufacture cells for domestic use but also for exports to other countries at competitive prices. However, the government will still have to develop a comprehensive R&D programme around these manufacturing plants with defined targets and goals for enhancing the competitiveness of the industry. India has a large amount of technical manpower available and by taking these steps we will ensure that we meet our ambitious target of 175 GW of renewable energy capacity by 2022.