Indian solar market is yet to recover from the woes inflicted by Chinese manufacturers.
The solar manufacturing in India is a costly affair for domestic manufacturers compared to their Chinese counterparts thanks to the huge incentives availed by the Chinese manufacturers in their homeland.
Many solar companies have failed to compete with foreigners invading in their home turf, industry reports suggest.
One of the latest casualties is Indosolar, India’s largest manufacturer of solar cells by capacity, which is facing severe liquidity crisis. Of late, the company has asked lenders to restructure its debt for a second time, Bloomberg reported.
Indosolar has stopped production at one of its plants because it could not compete with the Chinese players offering products at much lower price. The facility in Greater Noida, Uttar Pradesh state, has the capacity to produce 160 MW of photovoltaic cells a year, the company said.
India is one of the fastest growing countries in terms of energy consumption. Currently, it is the fifth largest consumer of energy in the world, and will be the third largest by 2030, estimates said.
Thanks to the favorable geography, India can receive well over 5000 trillion kWh of pure solar energy each year, which is far beyond the annual power consumption of India. India can harvest solar energy hugely in remote areas where conventional energy providers have failed to serve.
Despite this potential, India has not yet developed a sustainable solar ecosystem in the country. It hugely relies on imports. Last year Ministry of New and Renewable Energy (MNRE) said nearly 70 percent of the JNNSM projects used imported solar cells.
However, the government is now keen to support the industry by imposing domestic content requirements for the Phase 2 of JNNSM. This move, though opposed by countries like the U.S., boosts the morale of the domestic solar manufacturing industry in India.
The trade war will create short-term struggles for the industry, but such initiatives from the government is imperative to support the domestic sector and will help the market stabilize and remain competitive in the long run.