Solar PV Manufacturing in India: Poised to Benefit from Strong Demand-Centric Policy?
Views from Intersolar India 2014
By Vijay Kundaji, SEMI India
Intersolar India 2014 (Mumbai, November 18-20) was held against the backdrop of a new government that is committed to significantly expanding the role of solar energy in meeting the enormous and diverse energy needs of the country, on the one hand, as well as revitalizing Indian manufacturing, on the other. This is obviously good news for everyone in the solar industry — from manufacturers to project developers to everyone else in the associated supply chain.
Many who visited and participated in the event were talking about “100GW.” This figure refers to the, as yet unofficial, expanded target for solar energy generation capacity. India’s Energy Minister, Piyush Goyal, has suggested that the Jawaharlal Nehru National Solar Mission (JNNSM) should be revised to aim for 100GW by 2022 instead of its earlier 20GW target.
was a clear sense that a viable and pragmatic path forward for Indian
manufacturing had been found via the expanded demand that is planned exclusively
for domestic manufacturers (through public sector solar projects to be built by
organizations such as National Thermal
Power Corporation, Coal India and the Department of Defence), without derailing
the growth of privately developed solar power plants by levying anti-dumping
duties (ADD) on imports from China, Malaysia, Taiwan and the U.S. (The Ministry of Commerce had recommended, in
May 2014, after an extensive investigation, that stringent ADDs be imposed on
the import of solar panels from these four countries. This prospect had shaken
2014 has come with happier tidings and rising optimism. The JNNSM Phase 2 (which allocated 375MW of generation capacity to projects based on domestically manufactured cells and modules, at the end of February) along with state power projects, together, total about 2000GW of power plant capacity under development today. There has been a reported recovery in exports by Indian manufacturers made possible in part by European and U.S. ADDs and curbs on Chinese products. And now, there is the prospect of an ‘enhanced’ JNNSM with large, GW-sized NTPC and public sector projects to be built exclusively with Indian-made cells and modules. All of this coupled with the Government’s high profile ‘Make in India’ campaign has translated into stock prices of Indian cell manufacturers rising, cell lines coming back into production and even some fresh equipment orders.
Intersolar India saw three conference discussions on November 19 that addressed aspects of Indian manufacturing and featured speakers from across the stakeholder spectrum.
SEMI and VDMA (the German Engineering Federation) co-organized two manufacturing-focused panel discussions on the afternoon of November 19 that were sponsored by Royal DSM.
The first discussion, entitled, “Manufacturing in India — Where is the Real Opportunity?” featured speakers representing different segments of solar PV supply chain and included: Hemal Ghilani of equipment and production line maker Meyer Burger; UK Jayaram of Indian EVA and backsheet maker Renewsys; Prakash Suratkar of Innorel Systems, an Indian power electronics start up; Robert von Beulwitz of materials and coatings maker DSM; and Shailesh Vaidya, co-founder of the India-based solar tracker manufacturer Scorpius Trackers. The session was moderated by Dr. Florian Wessendorf of VDMA.
The second panel entitled, “A Holistic Approach to Building Solar PV Manufacturing in India” featured: Sanjay Sah of consulting firm KPMG, who authored a white paper in July this year, quantifying the solar manufacturing opportunity in India; Ivan Saha of leading Indian module maker Vikram Solar; Kolan Saravanan of cell equipment provider Centrotherm PV; and Puneet Gupta of leading equipment maker Applied Materials.
An earlier “Indo German Energy Forum: India’s Way to a Bright Solar Future,” moderated by Alok Brara of Renewable Watch, featured: Martin Ammon of EuPD Research; Ivan Saha of Vikram Solar; Mayank Shah of Waaree; Jagdish Prasad Agarwal of Welspun; and Reihard Ling of IBC Solar. Panelists addressed aspects of Indian manufacturing.
A summary of views and perspectives from these sessions at Intersolar India:
- While there is still divergence between the views of project developers and manufacturers on the issue of domestic content requirement (DCR) mandates and ‘net benefits’ to the economy of each approach through job creation, cost-of-energy considerations and so on, the Government seems to have found a creative way to transpose the “either-or” debate into one that, when implemented, will transform opportunities for both camps substantially. It plans to enhance the solar generation capacity goal (to ‘100GW’) and has decided not to impose ADDs. Instead, it will carve out a separate market for domestic PV cells and modules. This approach will also help drive towards a stated JNNSM goal of seeing 5GW of manufacturing capacity established in the country.
- Indian-made cells are, today, behind the global efficiency/performance curve as a result of the financial distress of manufacturers over the last three years and consequent drying up of funds to upgrade technology. However, given support via demand creation, manufacturing lines can be upgraded either through process technology improvements and tweaks or through production throughput enhancement to meet the needs of the market.
- There is a need for 5-10 Indian manufacturers to achieve 500MW type capacities, each, for the industry to achieve scale and global competitiveness. DCR through the current approach could help this happen.
- It was suggested that a ‘non-turnkey’ strategy for production lines might be the right way to go, in the future, to achieve lower cost in India. It was felt that there is enough expertise built up in the country for this. Some turn-key lines in India seem to have found flexibility and upgrading a challenge.
- Key policy elements that will enable India to achieve a market of upwards of 5GW a year and go free of support/subsidies of any kind and build domestic manufacturing scale include long-term policy stability, visibility and vision, low interest rates for the solar industry, implementation of intent to rationalize the duty structure for manufacturers and strengthening other forms of support for local manufacturing (the modified special incentives package scheme as one example), creation of strong domestic demand and maintaining a free market climate.
- From an industry perspective, Indian cell/module manufacturers needs to use the opportunity that will open up, starting this year, to achieve global price/performance competitiveness through process and production-throughput improvements and optimizations, incorporation of new materials and technology, and aligning with the global technology roadmap.
- Indian balance-of-system companies and system integrators have significant opportunities to innovate, develop ‘IP’ and solutions suited to Indian conditions and needs, and carve a niche for themselves. There are examples of Indian companies that have established a local and global presence, and a sound order book, supplying niche solutions such as trackers based on in-house IP.
- There are differing views on vertical
integration and the need for
to go ‘upstream’ into silicon and wafer production to support a globally competitive cell and module industry. While turnkey equipment solution providers are seeing inquiries from India for integrated manufacturing, and even though 60% of module costs lie in the silicon, wafers and cell stages, there is still a sense that given the ‘costs of ensuring high-reliability’ power in the country, that the case for moving into wafering and silicon is not clear cut. India
- While India’s software/technology and
associated services industry that has grown substantially over the last two
decades is susceptible and vulnerable to movement wherever wages/costs of labor
are lower, manufacturing is a more ‘located’ activity and is far more
stable. It is good therefore to see the Government’s
broader ‘make in
’ campaign now and it could be very timely for Indian solar manufacturing to recover. India
For more information on PV at SEMI, visit http://www.semi.org/pv
December 15, 2014