India: Propects looking bleak for cell manufacturers

Prospects are not looking too good for Indian crystalline PV cell producers. NPD Solarbuzz found in its report "PV Equipment Quarterly" that manufacturing capacity in this segment reached a five-year low during 2013 despite having had millions of dollars flowing in between 2006 and 2012. $470 million in investment was injected into new cell fabs within India in a bid to establish the country as a low-cost PV manufacturing powerhouse in this period.

Despite the investment boom, production has been a bust. Most of the production equipment that was shipped to India within this time frame is now idle. Very little expertise has also been gained in terms of running cell capacity during this investment phase. NPD Solarbuzz stated, "If currently-ramped cell capacity was run at maximum utilization rates, fab output would supply less than 10% of the domestic Indian solar market during the next 12 months."

Low cost supply dependence

The module end-market in India has been dominated by foreign suppliers. First Solar takes a chunk of the pie with 15% market share in the 12 months leading up to 2Q13. Chinese companies have also established themselves in the market with Canadian Solar, Jinko, Renesola, Trina and Yingli occupying the next five ranking positions for module supply, occupying 46% of total market share.

Just recently First Solar urged India to drop its dumping investigation citing flawed data.

Finlay Colville, vice-president at NPD Solarbuzz stated, "The prospects for Indian c-Si manufacturers remain bleak, with many of the existing producers lacking cash to restart operations. Although trade investigations by the Indian government against imported PV products are ongoing, the lack of high-volume and low-cost fab expertize forms the key barrier to local solar cell makers. As a result, continued growth of solar deployed within India has become dependent on low-cost foreign supply."