REI: Finance challenges remain

Like most photovoltaic and renewable energy trade shows in 2012, the REI Expo is smaller than in previous years, with around 450 exhibitors, according to organizer reports. The three-day show is expected to attract between 10,000 to 12,000 attendees. REI is not exclusively a solar event and includes geothermal and wind power exhibitors.

In conversation with show attendees, pv magazine has learnt that the Indian market is expected to see between 300 MW and 400 MW of new photovoltaic capacity added in 2012, which is below expectations. One of the major hurdles to a more rapid deployment of renewables in India is challenge of finding project financing, under favorable terms.

Charlie Gay from Applied Materials reported that interest rates in India could be as high as 14% to 15%, as the Indian banking sector remains unfamiliar with renewable-energy development. "This slows down the installation business," said Gay. Uncertainty surrounding renewable energy policy in India in the future also has caused Indian bankers to be cautious of lending to the sector.

Thin film modules continue to be a major force in the Indian market, and in particular First Solar’s. The American firm benefits from US Export Import Bank loans, which can be made to Indian project developers, to fund the purchase of its CdTe modules. Of the around 350 MW of photovoltaic capacity expected to be added in 2012, around 200 MW is thought be First Solar’s alone.

Another factor playing into the thin film’s success in India is that, at present, thin film modules are not subject to domestic content provisions, under the country’s photovoltaic support schemes. At REI there has been much talk on the trade show floor that this loophole may soon be closed, as soon as January 2013.

Indian photovoltaic manufacturers continue to face challenges in the current trying market conditions. EuPD Research’s Markus Hoehner reported to pv magazine that he believes the utilization rates of Indian crystalline-silicon manufacturers may be as low as 15%. Hoehner also said that Indian manufactures also lack the funds make investment in new automation and fab modernization equipment, to update lines.

Despite the decline in the number of attendees at this year’s REI, organizers say that it remains the country’s premier photovoltaic event. The 6th REI continues until Friday.