India: new policy to support solar manufacturing mooted16. February 2016 | Applications & Installations, Industry & Suppliers, Market & Trends | By: Jonathan Gifford
Indian minister indicates that the government is developing policy to foster solar manufacturing in the country. Minister for Power, Coal, New and Renewable Energy, Piyush Goyal said that he sees the potential for India to establish 10 GW of solar manufacturing by 2020.
2016 is shaping as the year in which India accelerates towards to bold solar ambitions. With a cumulative installed PV capacity more than 9 GW expected to be achieved by March this year, India's Ministry of New and Renewable Energy (MNRE) has forecast a further 12 GW of solar to be added by March 2017.
Some industry observers are less bullish on the outlook for the Indian market than the MNRE. Bloomberg New Energy Finance (BNEF) expects more like 3.5 to 4.1 GW to added in the 2016 calendar year. These figures still represent substantial growth, and it is becoming apparent that the Indian market is reaching somewhat of an inflection point.
Indian English-language daily The Hindu published Piyush Goyal's comments today, reporting that the energy minister will target "end-to-end" solar manufacturing with its new policy.
"I see a potential for manufacturing capacity of 10 GW for the [next] three to four years." Piyush Goyal said.
Answering a question regarding the impediment to PV manufacturing posed by high power prices in the country, Goyal said that states such as Jharkhand, Odisha, and Chhattisgarh, are likely locations for solar manufacturing. These states currently produce surplus power.
"Chief Ministers of these states have assured me they will look to promote solar manufacturing," said Goyal.
New plans to increase the level of solar manufacturing in India have been been announced over recent months.
- Chinese manufacturer Trina has signed an MOU with the government of Andhra Pradesh to develop a 2 GW capacity facility in India in November 2015.
- JA Solar and Essel Infraprojects Limited signed an MOU for a 500 MW cell and module fab in May 2015.
- Japan's Softbank is reportedly pursuing plans to partner with Bharti Enterprises and Foxconn Technology Group to develop manufacturing in India, in a deal worth US$4 billion.
- In January 2015, SunEdison announced plans to develop a US$4 billion facility in Gujarat and has signed an MOU with the Adani Group to pursue this.
Whether these plans are realized stands to be seen, and the history of the solar industry is littered with the remains of manufacturing projects that fell by the wayside. Regardless, the Indian government apparently does not want to supply all of its 100 GW by 2022 solar goals with imported components.
"Domestic manufacturing in India would be cheaper than anywhere in the world," Piyush Goyal said.
Turning to project development in India, Goyal noted that recent "record low" prices achieved by solar project bids had given the government confidence in PV technology. Goyal, himself an investment banker, said that long-term financing options for solar projects are being developed, including working with the World Bank.
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