A file picture of a solar energy plant in Pavagada in Tumakuru district.
| Photo Credit: AP
With 110 gigawatts (GW) of solar photovoltaic (PV) module capability set to return on-line in the subsequent three years, India will become self-sufficient and will probably be the second-largest PV manufacturing nation after China, says a brand new joint report from the Institute for Energy Economics and Financial Analysis (IEEFA) and JMK Research and Analytics.
The report finds that India’s cumulative module manufacturing nameplate capability greater than doubled from 18GW in March 2022 to 38GW in March 2023.
Jyoti Gulia, founder, JMK, and co-author of the report, stated a beneficial coverage setting created by the Indian authorities is the main driver for this push in India in direction of PV manufacturing. “Production linked incentive (PLI) scheme may prove to be the necessary catalyst which will significantly augment India’s PV manufacturing capacity in the coming years,” she stated.
Gujarat main State
“In terms of upcoming PV manufacturing installations, Gujarat is the leading state in India. It accounts for nearly 57% of all the upcoming PV manufacturing capacity. Some major reasons manufacturers chose Gujarat for setting up their PV fabrication facilities include cheaper industrial electricity prices and easy access to ports for imports and exports,” she added.
The report’s co-author Vibhuti Garg, Director, South Asia, IEEFA, stated after India attains self-sufficiency in two to 3 years, the subsequent plan of action needs to be to problem and compete for dominance in each high quality and scale in the world PV module market. Despite the aggressive market drivers, there are minor hurdles which are impeding the development of the PV manufacturing trade. Therefore, coverage stability is critical to maintain investor confidence in the market, she added.
Reliance on China
The report identifies some hurdles holding again the home PV manufacturing trade from realising its full development potential, chief amongst them over-reliance on Chinese imports for upstream parts of PV modules comparable to polysilicon and ingots/wafers.
According to the report, the sustained reliance on China for its uncooked materials is such that the majority (round 95%) of the upstream PV manufacturing capabilities are nonetheless in China. Another is the dearth of expert manpower, particularly in the manufacturing of those upstream parts, Ms. Gulia added.
What is China doing in a different way in comparison with India to be at the high? “China has already achieved economies of scale given the huge PV manufacturing capacity that they have. Also, to bring this market to this huge scale, the Chinese government has offered cheap credit, free land, cheap loans, research funds, tax rebates, and sometimes even cash to support its manufacturing sector. Because of their large-scale integrated facilities and government support, Chinese manufacturers are able to absorb larger shares of the profit of their operational revenues. Thus, they are always able to invest significantly in a robust R&D infrastructure, hence always staying ahead of the curve than the rest of the world,” defined Ms. Gulia.
Holistic improvement
The report recommends that the authorities increase the PLI scheme to additionally embrace extra upstream parts, PV gear equipment and ancillary parts for extra holistic improvement of the PV manufacturing ecosystem.
“Moreover, as part of the long-term expansion plan, India must aim to build enough PV capacity to satisfy local demand and maintain a healthy global presence to become a viable competitor to Chinese PV products. However, India’s current major PV export markets – the U.S. and Europe – are ramping up their own PV manufacturing capabilities. In future, these countries may also potentially become self-sufficient in PV manufacturing. As a result, there is a greater impetus to explore other export markets for Indian tier-1 manufacturers,” the report added.
