Indian solar panel makers face stiff challenge from foreign players

A farmer putting solar panels in place on his farm in Chengalpattu, 85 km from Chennai

The domestic solar panel manufacturing industry is likely to lose to foreign competition even as India powers ahead toward solar target of 100 gigawatts by 2022.

Reuters has published an analysis on the possibility in the light of absence of restrictions in the sector.

One key point which indicates such a scenario is that projects to be developed by foreign companies in India are most likely to deploy panels manufactured by companies such as Trina Solar, the Chinese panel manufacturer.

Recently Japanese investor Softbank announced a $20-billion investment in renewable energy in India but insisted that although it was willing to consider manufacturing solar panels locally, Taiwan’s Foxconn would produce the panels and not a local player.

The technology currently available with Indian solar panel manufacturers is outdated and, therefore, more likely to be sidelined when competition arrives.

Over the past six months, some local players have seen better prospects owing to the surge in demand.

Reuters, quoting Jasmeet Khurana of solar consultancy Bridge To India, has reported that smaller manufacturers of India, particularly those that manufacture cells, will be adversely affected by the technology lag and bad price structures.

For instance, Indian solar panel makers such as Indosolar and Moser Baer roll out products that cost 8 to 10 percent more than foreign producers.

The report adds that the panel manufacturers won’t be able to turn to the government for help as it is currently more focused on creating jobs and meeting power demand across the nation.

Unlike China or Germany, the country is not protecting its solar panel manufacture sector. The government dropped anti-dumping duty on panel import last year, opening the doors to competition from better placed nations.

And foreign players making panels in India are expected to compete with local manufacturers to fulfil the so-called domestic content requirements for government projects. Even in such cases foreign players are likely to have the upper hand.

Ajith Kumar S

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