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Lack of progress in solar manufacturing setting India back

January 11, 2021

Saur Energy:

India’s solar manufacturing prowess, or lack of it, has been a regular cause for concern ever since the country started powering forward in capacity additions from 2016 onwards. A new report from IEEFA and JMK Analytics puts the spotlight on the sector, especially on its failure to ramp up even as demand went up domestically. It’s an issue that deserves attention, not just because of the $2.6 billion spent on imports every year since 2015, as the report says, but also for the strategic role of the energy sector. India’s 450 GW target for 2030 entails potential imports worth $18 billion per year, say the authors, perhaps the strongest and simplest reason for the government to look beyond piecemeal approaches and consider a larger effort.

While covering the usual issues with Indian manufacturing, namely, lack of scale, being behind on the technology curve (it claims share of Mono modules is only 13 percent of total manufacturing capacity), besides a cost difference of 15 percent to 20 percent for module manufacturing using imported cells versus domestic cells, the prognosis is inevitable. To achieve a real manufacturing breakthrough in India, there will be a cost to the exchequer involved, either in terms of incentives, or tariffs that will lead to a higher power cost. 

[Staff Report]

More: India’s Solar Manufacturing – A Tale of Failed Government Initiatives

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