India's $100 billion solar push draws foreign firms

[Matrixx]

India's $100 billion push into solar energy over the next decade will be driven by foreign players as uncompetitive local manufacturers fall by the wayside, no longer protected by government restrictions on the sector.

The money pouring into India's solar industry is likely to be soaked up by foreign-organised projects such as one run by China's Trina Solar - not the country's own solar panel manufacturers.

Last week, Softbank became the latest foreign player to enter India's solar market, leading an investment of up to $20 billion. The Japanese firm said it would consider making solar panels locally, but with Taiwan's Foxconn rather than a local manufacturer.

India's $100 billion solar push draws foreign firms - The Times of India

 

[Matrixx]

SOLAR TARGETS

India has said it expects peak power demand to double over the next five years from around 140,000 megawatts today. To help meet that demand, 100,000 MW of new capacity is to come from solar panels, and of that it wants at least 8,000 MW to come from locally-made cells.

Foreign players manufacturing in India will probably win the bulk of those orders.

Indian rivals like Indosolar and Moser Baer produce panels, but they cost 8 to 10 percent more than foreign producers, Khurana said.

It is not yet clear which foreign firms will emerge as the winners, with most of the facilities years away from being built and the big tenders for huge solar parks touted by the government still to be awarded.

But those who can quickly build scale will be the most able to compete on cost.

"The lowest cost in manufacturing will only come from scale and integrated facilities," said Sujoy Ghosh, India Country Head at US-based First Solar.

First Solar is to build 5,000 MW of solar power before 2020, but will rely on imported panels for now because it is cheaper to buy component parts internationally where they are more readily available.

As for some of India's small panel makers, they are looking to complement the efforts of foreign players instead of trying to derail them.

Maharishi Solar, a small manufacturer based in Delhi, is looking to tie up with a foreign company, the company's head Ajay Prakash Shrivastava told Reuters.

It stopped producing solar panels a few years back as it could not compete with foreign manufacturers, primarily Chinese. Shrivastava said import panels are as much as 45% cheaper thanks to subsidies in their home countries and lower borrowing costs.

"The Indian manufacturers do have a disadvantage," he said. "We are trying to find a partner who can bring in the latest technology."