The long read: International investments in Indian PV
From pv magazine 09/2022
India had installed a cumulative 57.7 GW of solar power generation capacity as of June 30. Achieving India’s announced target of 280 GW to 300 GW of PV generation by 2030 implies good business for solar module manufacturers over the coming years. However, India’s own manufacturing capacity sits at just 3 GW to 4 GW of annual capacity for PV cells, 10 GW to 15 GW of modules, and no polysilicon or wafer manufacturing capacity. Eyeing the potential market, domestic manufacturers are carrying out significant expansions, and foreign companies are exploring ways to enter the market.
First Solar was the only thin-film player among 15 bidders applying under the Indian government’s production-linked incentives (PLI) scheme for solar manufacturing, with the rest opting for silicon. Irrespective of the tender outcome, the manufacturer has gone ahead with its plan of setting up a cadmium telluride thin-film module facility in the country, with an annual capacity of 3.3 GW. The India facility is on track to start production in the second half of 2023.
“We believe this facility will demonstrate that fully vertically integrated thin film manufacturing can be more cost competitive and sustainable than the crystalline silicon equivalent,” Sujoy Ghosh, vice president and country managing director-India at First Solar, told pv magazine.
First Solar is laying the groundwork for a localized supply chain even as it focuses on commissioning the facility. The company has chosen the state of Tamil Nadu to set up its plant, selecting it for its “industrial land-bank with permits in proximity to a major seaport, a well-developed urban infrastructure near the location, access to a skilled technical talent pool, reliable water and power infrastructure delivered to the door-step, and an attractive incentive package from the state government,” said Ghosh.
Axitec Energy, a German solar module brand, is also keen to be a part of India’s solar growth potential. It is exploring ways to collaborate with existing Indian manufacturers. The push for the entry comes partly from the increasing demand for “Made in India” modules in the export market. Axitec’s cooperative model means it will not be directly manufacturing the modules in India. It will instead be manufacturing in existing facilities of Indian manufacturers that can meet its BOM and quality criteria.
“We have our quality managers and inspectors round the clock while these factories make modules for us. We will use it for our customer base in India, and we are potentially looking to cater to the world market with these ‘Made in India’ modules,” said K Dheeraj Ranka, business development manager of Axitec Energy India.
Reliance steps up
REC Solar, a leading HJT manufacturer, expands to the Indian market by way of an acquisition made by India’s Reliance Industries. Together, REC and Reliance have huge expansion plans in India, Singapore, and other locations. Reliance plans to use REC’s technology in its fully integrated, metallic silicon to PV modules gigafactory at Dhirubhai Ambani Green Energy Giga Complex, Jamnagar, initially starting with 4 GW capacity per annum, eventually growing to 10 GW.
Only a few months after its acquisition by Reliance, REC launched its newest innovation: the high-efficient, lead-free & RoHS compliant REC Alpha Pure-R solar panel, which will also be showcased at the REI trade show in India in late September. With this, REC has added 600 MW of HJT capacity as of August, bringing 1.2 GW of production to its Singapore production capacity. While the expansions in Singapore and India are ongoing and on schedule, REC and Reliance are looking for thousands of new staff to join them for their manufacturing operations.
Power Roll, a UK-based flexible, low-cost solar film developer, sees a big market for its flexible solar films in off-grid installations in India. The company has a pilot plant in the UK and is expanding to India with multinational Thermax as its market development and manufacturing partner.
Production at Thermax is yet to start. “We are exploring the potential to establish a large scale factory producing up to 6 million square meters of solar film per year, with capacity of up to 1 GW per annum, which could produce 900 MWh of electricity per year once installed on rooftops,” said Neil Spann, CEO at Power Roll.
“Unlike conventional silicon panels, our films don’t require expensive input materials. The production is not labor-intensive. India has good competencies in printing, packaging, and holographic films. Also, Power Roll believes in manufacturing close to its markets. These are the reasons for choosing to manufacture in India,” said Spann.
Among other major entrants to India are Germany’s NexWafe, which has also partnered with Reliance for joint technology development and commercialization of high-efficiency monocrystalline “green solar wafers,” and US-headquartered CubicPV, which plans a 2 GW wafer and cell facility in India.
China supplied 96% of India’s solar cell and module imports in the first quarter of the calendar year 2022, according to a report by Mercom India. Chinese manufacturers cannot afford to ignore the manufacturing opportunity in India, given the enormous size of the market.
However, shifting geopolitics that includes some anti-China rhetoric, seems to deter Chinese investment in India. Then there are policy issues, as well, with the power sector being one of strategic national importance. China is a neighboring country sharing a border with India. Therefore, Chinese companies require additional approvals from the Indian government.
“Political sensitivity to any kind of commerce relationship with China is still very high because of recent border conflicts. The government has introduced a carveout in many policies putting restrictions on investment or trade with neighboring countries. The Chinese companies fear that they will not get some specific approvals or ad hoc restrictions will be imposed on them,” says Vinay Rustagi, managing director, Bridge to India Energy.
The Indian government’s approved list of PV models and manufacturers (ALMM) mandate indirectly bars Chinese companies from supplying modules to government projects. As per the ALMM requirement, only the models and manufacturers included in the ALMM list are eligible for supply to government projects. So far, no Chinese manufacturer has been included on the list.
“Longi was the first international company to announce its plans for manufacturing in India, but the political headwinds haven’t been favorable towards a local manufacturing set-up yet. Though the government’s intent is right in favoring domestic manufacturing and fully supporting it, there needs to be a gradual shift and not a sudden jerk,” says Pradeep Kumar, managing director of Longi Solar India.
“What we are today witnessing is a rush of policy measures geared towards thwarting international imports almost to a sudden screech. For any international company, especially a company like Longi, bringing manufacturing excellence is not an issue, what is more critical is the business visibility and viability in the long run. Unfortunately, we are still some time away from that.”
Trina Solar is another Chinese PV major keen to manufacture in India. The company has sold 8 GW of modules in India within ten years of starting its operations in the nation. And it has been exploring local manufacturing opportunities for years. In 2016-17, Trina Solar bought land for its manufacturing plant in India but had to abandon its plans due to the prevailing solar market conditions. Trina is still investigating the Indian market, given its enormous potential.
In addition to the ALMM listing requirement, the Indian government has imposed a basic customs duty (BCD) of 25% for the import of cells and 40% for modules. The move is aimed at making domestically manufactured modules competitive with imported products.
“Considering that India is still in the process of setting up the solar value chain in India, any policies focused on limiting imports will also impact the solar value chain for the domestic manufacturers, says Longi’s Kumar. “Out of approximately 10 GW to 12 GW lines under commissioning, only close to 2 GW to 3 GW are integrated. The rest are module lines, which will still need solar cells, glass, backsheet, etc., from the international market. Hence shifting the downstream dependence with upstream dependence will not make effective changes in the overall scenario unless we have the entire value chain.”
India’s top business conglomerates Adani and Reliance are geared to exploit the opportunity in this scenario. Both companies are going ahead with their plans for vertically integrated solar modules and ancillary production in India.
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